Chip production capacity is in a hurry, and the supply chain releases a signal of tension

Recently, things about the shortage of chip supply capacity have been spreading in various fields. In the process, some people are happy and some are sad. Let’s take a look at the supply across the supply chain.

  Silicon wafers: 12-inch capacity is almost fully loaded

Xu Xiulan, chairman of Universal Crystal, said yesterday that the semiconductor market will be better next year than this year, and 2022 will be better than 2021. Currently, the business of semiconductor silicon wafers of all sizes of Universal Crystal is very good, and the 12-inch production capacity is almost fully operational. In the past five years and the expected future five years, the highest growth rate will be 12-inch products.

Xu Xiulan explained in a conference call yesterday that Global Crystal intends to acquire the German business Siltronic, and expressed her views on the market situation. Universal Crystal mainly supplies the most important silicon wafer materials for first-tier semiconductor manufacturers such as TSMC and Samsung. Xu Xiulan sees the overall semiconductor industry outlook, which is quite indicative.

Xu Xiulan believes that in the past five years and the foreseeable future five years, the 12-inch semiconductor silicon wafer products will have the highest growth potential. Talking about the acquisition of Shichuang, she believes that the 12-inch products of Universal Crystal and Shichuang have their own advantages, but the products are different.

Shichuang’s revenue is about 0.75 Global Crystal, and by the end of the third quarter, Global Crystal’s cash and cash equivalents were about 26.93 billion yuan. Talking about the funds needed for this merger, Xu Xiulan said that they will borrow from the bank first, and then divide them into two groups, one group will strengthen the synergy effect of the merger, and the other group will plan to issue new shares or global depositary receipts (GDRs), and gradually Reduce the debt ratio; currently, Global Crystal has 15 production sites in nine countries around the world, while Shichuang has four factories in three countries including Germany, Singapore and the United States.

Xu Xiulan emphasized that everyone can see that Shichuang’s financial situation is also very healthy. Therefore, the merger and acquisition at this time has nothing to do with the prosperity, but both parties believe that this is the right direction, and technology development, capacity expansion and other aspects can be accelerated. .

The legal person pointed out that, including the new plant in South Korea, the monthly production capacity of Universal Crystal 12-inch silicon wafers is about 1 million, and the 12-inch production capacity of Shichuang is also similar. As for the current market leader Shin-Etsu’s monthly production capacity of 12-inch silicon wafers is estimated to be about 2 million pieces.

The legal person estimates that Global Crystal’s market position in terms of revenue has already taken the top spot, and in the next few years, it will not be a dream to further win the leading position.

  Foundry: Will eight-inch wafer foundry prices increase significantly?

On November 24th, according to foreign media reports, industry sources said that in 2021, 8-inch wafer foundry quotations will rise by up to 40%. Industry sources said that in 2021, 8-inch foundry quotations will increase by 20-40%. In the fourth quarter of this year, pure-play foundries including UMC, GF and Vanguard International Semiconductor (VIS) raised their 8-inch foundry prices by about 10%-15%.

Previously, in August of this year, industry chain sources revealed that chip foundries including TSMC and UMC increased their 8-inch wafer foundry quotations by 10%-20%.

It is reported that since 2018, there has been a shortage of 8-inch wafer production capacity, mainly due to the increase in demand for CMOS image sensors and fingerprint recognition chips driven by mobile phone multi-cameras and fingerprints.

Industry chain sources had previously predicted that the tight 8-inch foundry capacity could continue until the end of next year.

In addition, people in the industry chain have mentioned many times before that due to tight production capacity, it is difficult to meet market demand, and 8-inch wafer foundries are considering raising their wafer foundry quotations in 2021.

According to foreign media, after the rise in foundry prices, chip suppliers may increase the price of chips to make up for the rise in foundry costs. At the same time, the price of notebook computer power management chips may also rise as a result.

 Packaging and testing: foundry packaging and testing will be tight until the second quarter of next year?

The legal person pointed out that the demand for the iPhone 12 series continues to exceed expectations. Among them, the supply of the iPhone 12 Pro continues to be in short supply, mainly due to the shortage of some key ICs, the tight production capacity of advanced process wafer foundry and the shortage of packaging and testing supply will continue until the second quarter of next year.

Observing the shipment status of the new iPhone 12 series, the legal person pointed out that the demand for the iPhone 12 series continued to exceed expectations, but the supply could not keep up, especially the iPhone 12 Pro supply continued to be in short supply, and the supply gap was larger than the iPhone 12 and iPhone 12 Pro Max .

The legal person said that the iPhone 12 supply problem is mainly due to the continuous shortage of some key ICs, which will have a certain impact on the overall Apple supply chain manufacturers’ shipment expectations this year.

From the perspective of the semiconductor chip and packaging and testing supply chain, the legal person pointed out that Apple (Apple) continues to pull and replenish goods, the demand for advanced process chips is booming, the wafer foundry capacity is quite tight, and the back-end packaging and testing capacity is also facing difficulties, and the production capacity is in short supply. The gap continues to widen.

The legal person estimates that the repeated overbooking of downstream customers and the situation of queuing to place orders for wafers will continue at least until the second quarter of next year.

Tianfeng International Securities analyst Ming-Chi Kuo pointed out a few days ago that demand for the iPhone 12Pro and Pro Max was better than expected, offsetting the lower-than-expected demand for the 12 and 12 mini, and overall iPhone shipments were better than expected. He is looking forward to the momentum in the shipment of the iPhone 12 series in the first half of next year and the demand for new iPhone replacements in the second half of next year.

Techinsights, a technical analysis company, recently issued a report analyzing the iPhone 12 Pro model with a storage capacity of 512GB, estimating the overall manufacturing cost of about $514. If the price of a single machine in the U.S. market is roughly estimated at about $1,299, the proportion of hardware manufacturing costs is about 39.5%.

The foreign technology website iFixit previously dismantled the iPhone 12 Pro and analyzed key component suppliers, pointing out that in addition to the A14 processor designed by Apple and manufactured by TSMC, the US-based memory manufacturer Micron supplies LPDDR4 SDRAM; Korean-based memory Major Samsung (Samsung) provides flash memory storage; US-based major manufacturer Qualcomm (Qualcomm) provides transceivers supporting 5G and LTE communications.

In addition, Qualcomm also supplies RF modules and RF chips that support 5G; USI Electronics, a subsidiary of Taiwanese factory ASE, supplies ultra-wideband (UWB) modules; Avago supplies power amplifiers and duplexer components; Apple itself also supplies Design a power management chip.

Techinsights further dismantled and analyzed. NXP provided the short-range wireless communication chip NFC, Skyworks also provided radio frequency components, and Broadcom provided power amplifier modules.

 Chips: Will price increases and shortages become the norm?

After the supply chain is strained, chip shortages and price increases seem to have become the norm.

First of all, looking at Nor Flash, some industry players said that the recent NOR market has continued to increase consumer demand, and the market supply has been tight. Not only Apple and non-Apple mobile phones have generally increased the use of OLED screens this year, which has greatly increased the demand for NOR chips, and other consumer goods. The demand for products is also quite good. In addition, the PC and NB have continued to pull goods, but the production capacity of the supply side cannot keep up with the demand, pushing up prices.

Macronix and Winbond both pointed out that customers have been actively placing orders recently, and they are rushing to buy goods without negotiating prices. Winbond also confirmed that some specifications have indeed increased. The two major NOR chip factories in Taiwan are quite optimistic about the market conditions next year, optimistic about the demand and the annual average price is expected to be better than this year.

In addition, the industry revealed that SMIC benefited from the strong demand from logic chip customers, and many power management chip customers directly increased their prices to ask for production capacity, so that SMIC has moved more production capacity to logic-related chips this quarter, which is relatively squeezed by NOR chip customers. In terms of production capacity, it is reported that its main foundry customer, Zhaoyi Innovation, has lost tens of thousands of wafers per month, which are all divided up by other logic chip factories, resulting in tight NOR supply and further pushing up prices.

Looking at DRAM, Huang Chongren of Power Semiconductor said that DRAM will be out of stock next year to an unimaginable level

In the past, the market basically believed that 8-inch wafer production capacity was tight and not lacking, but now Huang Chongren’s view on the supply chain situation is even more tense. no way. Although Power Semiconductor plans to build a new plant, the price of steel has risen, and workers are not easy to find. It may take at least three years. He expects that from the second half of next year to 2022, the logic IC and DRAM markets will be out of stock to an unimaginable level.

Huang Chongren explained that since the epidemic has begun to slow down, the first half of next year will be full of businesses waiting to be developed. In addition, applications such as 5G and AI will continue to push up, and the demand for semiconductors will only be more vigorous. At present, the 8-inch production capacity of LiSMC is about 90,000 pieces. The 12-inch production capacity is 100,000 pieces, and the overall capacity utilization rate has reached 100%. And in the next five years, foundry capacity will be the key to the semiconductor industry. Power Semiconductor has determined that prices will increase, and is currently actively carrying out de-bottlenecking, and has squeezed out more production capacity to customers.

PSMC said that it will continue the Open Foundry model, allowing customers to also invest in fabs to master more production capacity. Times are different now. In the past, many big manufacturers looked down on low-end production capacity, and now they have to look everywhere and ask for it, so Open Foundry is a good way for IC design houses to master enough production capacity. In the future, the production capacity of the new Tongluo factory has been planned to cooperate with major customers and make advanced deployment.

Huang Chongren also said that the demand for discrete components will surge after 2022, especially the demand for power management ICs will grow by nearly 2.5 times, coupled with sensor testing applications and automotive electronics, will continue to cause shortages of semiconductor production capacity, and the speed of new factory construction will not be able to keep up.

At present, the market situation of wafer production capacity is still to be checked. Whether the gap will become larger and larger next year is worth continuing to observe.

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