Doris Hsu, chairman of GlobalWafers Co., Ltd., the third largest semiconductor wafer fab in the world, recently stated that semiconductor silicon wafers are in short supply. GlobalWafers production capacity has been fully booked by 2020, and there is no sign of price reversal for at least four years. At present, the tight situation of wafer supply extends from 12 inches down to 8 inches or even 6 inches.
Since 2017, global silicon wafers have been in a state of imbalance between supply and demand, the price increase has been around 15%-20%. Since the first quarter of 2018, the world’s largest and second-largest silicon wafer manufacturers Japan’s Shin-Etsu Semiconductor and SUMCO has increased its offer, and analysts believe that the demand gap for silicon wafers in 2018 will be 10%-20%. The industry believes that with the increase in the price of silicon wafers, first-tier semiconductor manufacturers which have priority procurement advantages will not be much affected, but the pressure on small and medium sized and second-tier wafer fabs will be greater.
Doris Hsu revealed for the first time that some customers began to talk with GlobalWafer about orders from 2021 to 2025, and the price would not be lower than the price of 2020. GlobalWafer will select orders for priority delivery and will not lower prices. This means GlobalWafer’s order visibility up to seven years.
According to Doris Hsu's analysis, the shortage of semiconductor silicon wafers was caused by the limited increase in new production capacity and the continuous increase in demand for vehicles and new applications. The world's major semiconductor silicon wafer suppliers include Shin-Etsu, SUMCO, GlobalWafer, LG and Siltronic, the global market share of these 5 companies has reached 95%. There are plans to increase capacity in the near future, but the scale of expansion is not large. However, the tight supply situation has spread from 12 inches to 8 inches, and now even 6-inch production capacity has begun to tighten, the market demand is far exceeds expectations.
Doris Hsu also stated that GlobalWafer will concentrate capital expenditures on higher-priced 12-inch wafer capacity in the future, 8-inch capacity will through partners’ expansion, and 6-inch capacity will not invest any capital expenditure, if not enough to supply the market, customers can choose other suppliers.
