DIGITIMES reported on June 26 that the complex international trading environment is seriously affecting the semiconductor industry, resulting in rapidly rising inventory levels and a significant impact on supply chain performance.The recent decline in wafer prices has been rapid, manufacturers' orders have also been sharply reduced, and a number of silicon fabs are now cutting their revenue forecasts.
Currently, the silicon Wafer industry is a highly concentrated market. TOP5 silicon Wafer companies such as shin-etsu of Japan, Sumco of Japan, Global Wafer of Taiwan, Siltronic of Germany and LG Siltron of South Korea occupy 90% of the market share.
IC Insights previously reported that nine new 300mm fabs will be operational this year.In addition, six 300mm wafer manufacturing plants are expected to begin operations next year.In addition, the number of 300mm wafer manufacturing plants is expected to increase from 112 last year to 130 in 2021 and 138 in 2023.
Some in the industry worry that the expansion of production will further increase the pressure on wafer customers' inventories.Demand has slowed from a year ago as many semiconductor manufacturers have reduced orders so far this year, but there has been little change on the supply side.
As a result, broadcom has recently lowered its revenue forecast, which is expected to decrease by $2 billion.This is expected to adjust, is bound to trigger chain reaction of the industrial chain, expected in July will have more big factories lower financial forecast.
Germany's Siltronic, the world's fourth-largest silicon wafer maker, has lowered its full-year operating target for the second time in two months, warning that Q2 revenue will be well below Q1 and Q3 revenue will be poor. The full-year revenue forecast is expected to be 10 to 15 percent lower than 2018, more than the previous forecast of a 5 to 10 percent drop.
In addition, taishinke and SK Siltron, both of which are mainly in the spot market, have started to reduce their prices due to the weak demand in the spot market recently. Taishinke admitted that the silicon wafer market will be oversupplied in 2019.
Not all is so gloomy in the silicon wafer market, however.As a global city of silicon wafers for third ring spherulite, recently, its chairman, xiu-lan xu said at a conference in earnings, although at present a lot of customers due to the trade environment tend to be conservative, but thanks to the past two years signed about coverage, enforced for 8 ~ 9 (LTA), plus the international operation of the layout, ring spherulite affected relatively limited, forecast season 2 and 1 quarter operating flat, annual growth target unchanged.
But the market is changing so quickly that, although huanspheric has repeatedly stressed that it is not affected by spot price fluctuations, it has also had to face delays from customers.The market believes that huanspheric crystal has been talking with many customers for a long time before, but it is also facing the cooling attitude of customers, and the purchase volume and price cannot be compared with the previous two years.
Japanese silicon wafer plant has expressed a relatively optimistic attitude, the economic daily reported that advocates the group chairman Guo Zhihui said recently that the Japanese semiconductor silicon wafer plant have entered into three older and major customers, silicon wafer price basically can't adjust to 2021, recent price declines, temporarily part mainly is the spot.
He believes the short-term market volatility is due to the high uncertainty of global trade, and once the uncertainty is removed, silicon wafers will rise accordingly.As the wafer agent of shinetsu chemical, the world's largest semiconductor wafer manufacturer, tsung yue's opinion can also be regarded as that of Japanese fab.At the same time, kwok believes that the lower full-year revenue target is a reflection of the contract ratio. After all, last year, the company pulled the price of silicon wafers too high, and now it is only normal to fall back.
Meanwhile, shin-yue chemical recently said that 95 percent of its 2019 orders came from the LTA.Different from huanspheric crystal, xinyue has reached an agreement with the customer to deliver the goods within a certain period of time, although some customers requested to delay the shipment.As a result, the company is confident that it has no plans to cut the price of its wafers.
Taiwan semiconductor manufacturing co., a global semiconductor bellwether, hasn't adjusted its revenue targets either, with chairman Andy lau saying the first half of 2019 will be flat due to weak demand for high-end phones.With the return of market conditions, the second half of the year is expected to be better than the same period in 2018. The fourth quarter will be the peak of the annual revenue, and the annual revenue target will maintain a slight increase.
However, TSMC may cut its full-year revenue to a slight recession in July as sales of new iphones fall short of expectations as the company enters a peak season for new iPhone sales, the market said.
Finally, in the short term, relying on the high implementation rate of LTA, many silicon wafer companies vowed to resist the pressure not to cut prices, which may keep the market price relatively stable.But in the long run, fab forcing customers to pull will shift their risk in the face of a downward environment, putting them under pressure from high inventories.If the environment continues to deteriorate, it is believed that these leading companies will not be able to withstand the impact of price fluctuations in the market, and the impact of price reduction in the silicon wafer market is bound to be more severe.
Historically, no company has been able to keep prices constant and continue to thrive despite adverse circumstances.In addition to reducing wafer production, the most important priority is to help customers find sales targets.According to SEMI statistics, about 63 new fabs were built worldwide in 2017-2020, and about 26 of them were located in mainland China, indicating that the mainland's demand for wafers remains strong.By cooperating with relevant enterprises in mainland China, we can effectively help them release surplus wafer inventory, and help manufacturers seize the good opportunities for the take-off of China's semiconductor industry.Of course, wafer prices will no longer remain at such a high level.(coordinating editor: Andy)