Recently, the shortage of 8-inch wafer foundry capacity has further intensified, and the market has fully opened the mode of price increase.
It is reported that in order to ensure enough capacity, many IC design manufacturers have begun to actively plan the capacity of next year, some long orders even to the second quarter of 2021.
Some IC design manufacturers said that the current wafer foundry capacity is very tight, and the delivery time has been extended a lot. In the past, the delivery period was about two months, but now it has reached four months. Even if it is such a delivery date, it is still being robbed, otherwise there will be a huge risk of delivery failure.
Among them, especially 8 inch capacity is the most popular, especially in the Chinese mainland market, because the number of IC design enterprises is large, and most of them are mature process technology chips with 90nm and above. These chips mainly use 8 inch wafer foundry production. Therefore, although these IC designers are not big in size, they are huge because of the large number of them. In order to seize the production capacity, there are many fierce and even tragic competition stories.
In fact, the 8-inch wafer foundry capacity has been tight for several years, so far, it has become more and more intense. With such market demand, the major wafer manufacturers, especially the top ones in the world, have been expanding their production capacity.
This week, foreign media reported that Samsung Electronics, the world's second largest wafer foundry, is considering investment in automation expansion of its 8-inch wafer plant to improve production efficiency, foreign media reported this week.
It is reported that Samsung's 12 inch wafer production line is fully automated, that is, moving the wafer box in a dust-free room with the help of a transportation system erected at a height. However, the 8-inch wafers are still transported by the staff in a van. Not only Samsung, but other foundry companies also operate in this way.
According to Korean media reports, Samsung has tested automatic transportation equipment in some 8-inch wafer plants, and has won praise from employees.
Such an automation upgrade requires a lot of money, and Samsung estimates that additional investment of about $8.7 million may be required to import automated transport equipment in all 8-inch wafers. Moreover, such an investment is risky, because even if such a large amount of money is spent to transform the old production line, it is not clear whether the benefits can be matched. However, the company is still pushing ahead with the revamp because of the high proportion of samsung's revenue from the 8-inch wafer manufacturing business.
Go after me
Samsung is not an example. In recent years, manufacturers including TSMC, liandian, world advanced, SMIC international and Huahong semiconductor have been looking for various ways to expand the 8-inch wafer foundry capacity.
Not only now, Samsung has expanded its 8-inch capacity years ago. In addition to actively striving for advanced process orders, its 8-inch production line in Giheung, South Korea, will gradually contribute to Samsung's wafer foundry revenue, so as to help the company achieve its goal of 25% global foundry market share by 2023.
TSMC announced a new 8-inch wafer plant in Tainan in December 2018. This is the first time TSMC has built an 8-inch plant in 15 years since the establishment of the 8-inch plant in Songjiang, Shanghai in 2003. TSMC has been outsourcing some 8-inch capacity to the world's advanced.
According to TSMC's plan, the new 8-inch plant will be completed in 2020 and put into mass production. Wei Zhejia, President of the company, said that the new 8-inch factory is mainly to meet the needs of customers for special processes, and its main products include analog chips, sensors, drive chips and power devices such as MOSFET. From the application level, we can see that the chips produced are mainly analog sensing, power and power applications, which are the necessary chip categories for IOT sensing devices, electric vehicles and energy-saving equipment.
In the first quarter of this year, the production capacity of united power was about 940000 pieces. Since then, it has been very tense. Similar to TSMC, the capacity of united power has reached the limit, and it is difficult to receive more orders in a short period of time. In recent years, the capacity expansion of liandian in the mainland has been frequent, especially for the 8-inch factories and ships in Suzhou. It is reported that the monthly production capacity of Hechuan has increased from 64000 pieces the year before last year to 77000 pieces at the end of last year.
In the third quarter of 2020, the operation performance of lianpower was very eye-catching, with the capacity utilization rate approaching full load. The single quarter revenue reached NT $44.87 billion, a quarter increase of 1.09%, slightly better than expected, setting a record high.
Driven by the demand for panel driven IC and power management chips, it is estimated that the OEM price of 8-inch wafer will rise by 5% in the fourth quarter, and this tight production capacity will continue to next year. Liandian shares opened higher today, rising 0.95 yuan to 31.6 yuan.
The world advanced 8-inch wafer capacity in the fourth quarter of 2019 is about 630000, and increased to about 730000 in the first quarter of this year, and has been in full load. For the world advanced, the demand for wafer substitution driven by 4k/8k large-size panel is the most prominent among the 8-inch wafer OEM orders, and the PMIC wafer replacement order of TV panel is also significantly temperature back.
It is worth noting that the Singapore 8-inch plant purchased by world advanced from global foundries has been officially put into operation, which is an important reason for the company's significant increase in production capacity this year compared with the fourth quarter of last year.
In terms of power crystal, although it is neither the main force of global advanced process nor the typical representative of 8-inch special process, the company used to be the largest DRAM factory in Taiwan. In the past, it made a lot of profits and also suffered big losses. In 2012, due to the impact of DRAM price decline, the net value per share became negative. After that, the company readjusted its operation strategy and transformed into a wafer foundry, in addition to replacing Kingston and Jingjing In addition to DRAM, Haoke has also invested in LCD driver IC, power management IC, CMOS image sensor and other wafer foundry businesses.
In 2013, Lijing turned from deficit to profit and maintained profit for 5 consecutive years. As of the first half of 2018, the company's capacity is still in short supply. Based on its years of DRAM technology and manufacturing skills, Lijing has turned from deficit to profit very quickly after transforming into a wafer foundry. This also shows how delicious it was to be a memory manufacturer and a wafer foundry with mature technology at that time.
The 8-inch wafer capacity utilization rate of SMIC and Huahong semiconductor is also very high. Among them, SMIC's is more than 95%, while Huahong semiconductor's is no less than 97%.
As the process of SMIC and Huahong semiconductor is mainly based on mature process nodes above 40nm, the proportion of their 12 inch wafer production capacity is not high. They are mainly 8-inch wafer, especially Huahong semiconductor. The company is famous for providing characteristic process OEM, which can be seen from its revenue: the total revenue of Huahong semiconductor in 2019 is $932 million, including three 8-inch factories in Shanghai Total revenue of $925 million.
SMIC's 8-inch production capacity is also fully loaded. The company plans to expand its 8-inch production capacity this year. According to the plan, it is expected to increase the production capacity of 30000 pieces per month in its three production bases in Tianjin, Shanghai and Shenzhen.
To sum up, in the past two years, although the 8-inch wafer foundry capacity is very tight, this situation has eased with the expansion of the capacity of major generation plants. The market sees the huge application space of 8-inch, which makes some old production capacity resume production, and many new 8-inch production lines around the world are under construction or have been put into production. What's more, manufacturers are more rational in the face of 12 inch production line investment, and are no longer as crazy as in previous years.
The helplessness of capacity expansion
However, with the passage of time and the explosion of application demand, especially the outbreak of CIS sensor in 2019, the capacity demand of 8-inch wafer foundry has been increased by leaps and bounds, which makes the capacity expansion speed of major manufacturers far lower than the growth rate of market demand. In addition, influenced and restricted by historical development and various objective factors, the pace of capacity expansion also presents a state of being more than capable. The main reasons are as follows.
First of all, there is a strong demand for analog chip applications. With the gradual landing of the Internet of things, 5g and new energy vehicles, the demand for power devices (mainly IGBT and MOSFET), CIS sensor, OLED panel driver IC, and TWS headset Bluetooth chip is quite strong, which provides more business opportunities for 8-inch wafer.
Secondly, 8-inch wafer foundry capacity and delivery time have been relatively tight. The 8-inch line production capacity of major wafer foundry plants is generally tight. Moreover, most of the analog and discrete device markets are dominated by IDM manufacturers, such as Infineon and Texas Instruments (TI). However, due to limited capacity, these IDMS usually outsource orders to foundry factories.
At the same time, in the process of shifting from 6-inch to 8-inch, some IDM's main production capacity is focused on the 12 inch line, and there is no additional 8-inch line. As a result, 8-inch products have to be outsourced. As a result, most of IDM's production expansion rate is lower than the growth rate of demand, and the proportion of outsourcing will be higher and higher, which will aggravate the situation that the supply of OEM orders is in short supply.
Moreover, the supply of related equipment is insufficient (many equipment factories no longer produce 8 inch wafer processing equipment. Therefore, the 8 inch wafer equipment popular in the world, especially in mainland China, and the limited output of 8 inch silicon wafers) are all the reasons for the tight market capacity.
The booming demand side and strong growth, as well as the shortage of supply side (silicon wafer, wafer foundry capacity and equipment supply, etc.) have jointly created a situation in which 8-inch wafer market has been in short supply in the past two years. From the current and foreseeable future situation, it is difficult to alleviate this situation.
However, on the other hand, this hot market shows the positive and dynamic side of the semiconductor industry, which can attract more attention, increase confidence, and have more room for operation. These are beneficial to China's semiconductor industry.
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Link to the original text:Semiconductor industry observation