8-inch wafer capacity is in short supply
Reporter of our newspaper / Chen Jialan / Guangzhou
Recently, the continuous shortage of 8-inch wafer production capacity has attracted attention, and the price increases of MOSFET, drive IC and power management IC have been heard.
The reporter of China business daily noted that the shortage of semiconductor production capacity started from wafer foundry, and was transmitted to packaging and testing. The shortage of goods promoted the price rise, and also spread to chip design, module suppliers, downstream terminal manufacturers, etc. At the same time, this phenomenon also prompted the semiconductor industry chain plate stocks to perform well.
Qiao an, a consulting analyst with trendforce, told our reporter that if the demand for wafer manufacturing is strong, it will drive the upstream silicon wafer shipment to be prosperous; and the tight production capacity will make the production cycle of downstream end products lengthen due to the shortage of parts and components.
Out of stock to an unimaginable level
How tight is wafer capacity at the moment?
“At present, the wafer production capacity is so tight that customers’ demand for production capacity has reached a panic level. It is estimated that from the second half of next year to the second half of 2022, the logic and DRAM markets will be out of stock to an unimaginable level.” Recently, Huang Chongren, chairman of the board of the chip foundry, Li Jidian, also pointed out the current situation of wafer capacity shortage.
In fact, Huang’s words are not alarmist. In mid October this year, Gu Wenjun, the chief analyst of xinmou research, posted an article on his micro blog to disclose that the boss of a chip design company knelt down to get the production capacity to the senior managers of the OEM factory!
In the trend of rising electronic market, global orders for chip OEM have experienced explosive growth in recent months.
November According to the semiconductor research office of trendforce Jibang consulting, in 2020, the epidemic will cause impact on many industries. However, thanks to the new normal of remote office and teaching, the penetration rate of 5g smart phones and the strong demand for related infrastructure, the global semiconductor industry will rise against the trend. It is estimated that the annual growth rate of global foundry output value will be as high as 23.8% in 2020 Breaking the peak of nearly 10 years.
Among them, the shortage of high-end chips is the most obvious, and the production capacity of 8-inch wafer is in short supply, and the expansion of production is limited, which has attracted more attention. In fact, 8-inch wafer foundry capacity has been hard to find since the second half of 2019.
From the demand side, the downstream demand of 8-inch wafers mainly comes from the fields of power management chip (PMIC), CMOS image sensing chip, fingerprint identification chip, display driver IC, RF chip and power devices. The continuous increase in demand for analog chips and power devices is the main reason for the shortage of 8-inch wafer production capacity.
As there are almost no suppliers to produce 8-inch equipment, the price of 8-inch machine is rising rapidly, while the price of 8-inch wafer is relatively low. Therefore, it is generally not cost-effective to expand 8-inch production. However, products such as power management chip and lddi (large size display driver chip) are most cost-effective in 8-inch factory, and they are not moving to 12 inch or even advanced process The necessity of the 8-inch plant production capacity can not keep up.
Driven by the 5g boom, power management chips benefit from the doubling of demand for smart phones and base stations, resulting in limited production capacity in short supply. Although some products have the opportunity to gradually shift from 8-inch to 12 inch factory, it is still difficult to relieve the shortage of 8-inch wafer demand in the short term.
The operation mode of China Resources micro (688396. SH) is mainly IDM, and also has the wafer foundry mode. The reporter learned from China Resources micro that the demand for power semiconductor MOSFET, IGBT, SBD and other products is relatively strong, and the production capacity is relatively tight. In terms of wafer foundry, 8-inch capacity is fully loaded, and orders for power management, MCU and MEMS are full.
Wafer production capacity supply and demand tension, the first impact is the wafer price fluctuations.
Most chip companies have raised the prices of 8-inch wafers by at least 20% in 2021, and even increased their emergency orders by 40%, benefiting from the strong demand driven by the home office trend and 5g boom, according to Taiwan media. For example, Lianhua Electronics Co., Ltd. (hereinafter referred to as “liandian”), Grosvenor Semiconductor Co., Ltd. (hereinafter referred to as “grid chip”) and world advanced integrated circuit company, these companies increased their prices by about 10% – 15% in the fourth quarter of 2020.
For the “price increase” report, Gexin said it would not comment on our reporter. However, the industry has reached a consensus on the price increase of wafer foundry.
Due to the trade problems between China and the United States, the equipment and material factory also sent out 8-inch wafer OEM orders, such as the news that SMIC will transfer the order to Taiwan factory in China. A number of media in Taiwan have reported that the 8-inch foundry capacity of liandian has been fully loaded to the second half of 2021. Under the situation that the supply of production capacity is in short supply and the customers continue to add more chips, it is imperative to increase the price in the first quarter of 2021.
On November 26, SMIC responded to the investor’s question “whether to raise the price of 8-inch wafer foundry” on the “Shanghai Stock Exchange E-interaction” platform, and said that the existing customer orders would be carried out according to the signed contract, and the price of new customers and new projects would be determined by both parties through negotiation. The company would also improve the average wafer price by optimizing its product portfolio.
Qiao an told reporters that the data of Jibang is that the price of 8-inch wafers in 2020 will increase significantly in the fourth quarter, about 5% – 10%, and it is expected that the price will rise by about 5% in 2021.
After the international manufacturers have the intention of increasing the wafer price, the domestic semiconductor enterprises are also concerned about whether the wafer price will rise.
As for the shortage of 8-inch wafer production capacity, the reporter learned from China Resources micro that there is indeed a price increase, but it is not a common phenomenon. According to the customer structure, China Resources micro has made appropriate adjustments for different product lines and terminal applications.
New clean energy (605111. SH) Investor Relations Department staff told our reporter that some of the company’s products did rise in price and made some structural adjustments.
Our reporter also noted that a number of semiconductor related enterprises in China have recently been intensively investigated by institutions, and the survey records show that price increase has become one of the most frequently asked questions in institutional research. In the capital market, the share prices of some listed companies in the semiconductor sector also rose.
In the survey, jiejie Microelectronics (300623. SZ) directly said that some products of VD MOS and trend MOS had been adjusted (increased) due to the price increase of wafer foundry this year.
According to the survey record released by Leon micro (605358. SH) on December 1, the continuous rise in semiconductor demand in the market has led to a shortage of supply in the industrial chain. The shortage of wafer foundry capacity and the rise in prices have driven the prices of silicon wafers, package testing and IC design. The company’s semiconductor silicon wafer and semiconductor discrete device business is driven by the continuous improvement of the integrated circuit market. At present, there are sufficient orders and full production capacity in hand. Whether the price of the company’s products increases is affected by many factors. Based on the current market situation and the actual situation of the company, some products are negotiating with customers on price increase, and the product price increase can be finally determined after consulting with customers. ”
CITIC Securities wrote in a research report on Huahong semiconductor (01347. HK) on December 2, benefiting from the strong demand for 8-inch mature process and tight production capacity, some companies in the industry have raised the price of 8-inch wafers. Huahong semiconductor’s 8-inch wafer plant capacity utilization rate has reached 102% since the third quarter of 2020. High capacity utilization is expected to enhance the company’s profitability. The day after the report was released, Huahong semiconductor’s stock price rose to more than 5%.
From the perspective of stock prices, the above companies are in a rising state recently. Recently, the stock prices of Li’ang micro, China Resources micro, Huahong semiconductor and jiejie Micro Electric Co., Ltd. have continuously reached new highs since listing.
Conduction upstream and downstream
The shortage of 8-inch wafer production capacity has also been transmitted to packaging, design and other upstream and downstream.
Compared with IDM (integrated component manufacturer) mode and foundry (Foundry) mode, fabless (Fabless IC designer) mode companies will face the challenge of not getting the capacity of wafer plants, which may have an impact on the sales growth of semiconductor companies with Fabless IC design company mode.
“One of the challenges faced by IC design is to go to the OEM to find the production capacity. At present, there are more companies placing orders, so it involves a production scheduling problem.” An IDM model enterprise in China told reporters.
Gu Wenjun believes that from the industrial point of view, the lack of OEM capacity will seriously affect the development of the design industry.
In addition, in the current chip shortage environment, the upstream terminal manufacturers’ demand for chips is far greater than the supply chain supply, which also makes the downstream terminal products lead to prolonged production cycle due to the shortage of components.
Li Hong, director of Zhaoyi innovation, a chip design company, said that the stock capacity is in orderly production, but the expansion of production capacity (due to the shortage of wafer factory capacity) will be affected by the strong demand side, and the newly added parts have not been put into normal operation.
As a chip design company, new clean energy mainly deals in the research and development of MOSFET and IGBT. The staff from the Investor Relations Department of new clean energy told reporters that the production capacity is very tight, but there is no such situation that the capacity of the wafer plant can not be obtained.
How to deal with the imbalance between supply and demand of wafer under 8 inches? Li, general manager of an IC design company in Shanghai, told reporters that they were also considering doing some countermeasures. For example, one is to actively develop other supply chain manufacturers and OEM factories; the other is to shift to high technology. “The 8-inch wafer plant is in short supply. Relatively speaking, the problem of capacity shortage of 12 inch wafer plant will be better. The 12 inch wafer area is almost 2.25 times of the 8-inch wafer area, and the large 12 inch wafer area will guarantee our production capacity.”
Qiao an told our reporter that at present, some 8-inch products have been transferred to 12 inch factories. In the medium and long term, this situation will be alleviated.
In addition, a person close to the wafer manufacturer said: “under the unbalanced supply and demand of 8-inch wafer production capacity, many foundry companies will screen orders and adjust product mix to give priority to products with high gross profit. According to market demand and production capacity, most of the chip shortage situation will ease, the earliest to the first quarter of next year. ”
In order to ease the production shortage of 8-inch wafer plants, it is reported that Lianhua electronics and other chip manufacturers are considering purchasing idle and mature 8-inch wafer plants.
The new clean energy investor relations department personnel disclosed to the reporter, the new clean energy’s wafer foundry mainly has Huahong Hongli, China Resources Shanghua, at present the company is actively developing some overseas OEM plants. “But at present, because of the epidemic situation, it is not very convenient to communicate back and forth. Later, we will go to the scene to communicate.” The person said.
However, it is not easy for a chip design company to change factories. Li Xing, general manager of the IC design company mentioned above, said: “to develop suppliers, each supplier has its own process particularity. For the same design, for example, it is not easy to change from one production line to another, and it is not easy for a wafer foundry to repeatedly test and cooperate with each other In general, we should try not to do it without changing production. If we want to do it, we must arrange in advance. “