Shanghai Silicon Industry Expects a Maximum Loss of 1 Billion Yuan in 2024; 300mm Silicon Wafer Capacity Upgrade Project Under Construction

On the evening of January 17, Shanghai Silicon Industry released its 2024 annual performance forecast.

According to the forecast, the company is expected to achieve a net profit of -1 billion to -840 million yuan in 2024, with a net profit attributable to shareholders after deducting non-recurring gains and losses expected to be -1.28 billion to -1.07 billion yuan.

Regarding the performance changes, Shanghai Silicon Industry stated that the global semiconductor market size grew significantly by 19% to exceed $620 billion. However, the recovery of the market from downstream to upstream still requires a certain cycle. Coupled with high inventory levels in the industry, the recovery of the semiconductor silicon wafer market fell short of expectations, particularly with a 12.1% decline in the shipment area of 200mm silicon wafers, leading to an overall market size contraction of 5.6%.

Shanghai Silicon Industry further explained that the sales volume of its 300mm silicon wafers increased significantly with capacity expansion and market recovery, but the unit price declined due to market competition. Additionally, the high upfront investment in capacity expansion projects and sustained high-level R&D expenditures brought short-term cost pressure, collectively impacting the company's performance.

"During the reporting period, the sales volume of the company's 200mm silicon wafers was basically flat, but the unit price declined significantly due to market factors. Furthermore, subsidiaries Okmetic OY and Shanghai Simgui Technology experienced goodwill impairment due to market impacts, with an initial estimated impairment amount of approximately 300 million yuan."

Industry-wise, the International Semiconductor Equipment and Materials Association predicts that the global semiconductor silicon wafer shipment area will drop slightly by 2.5% YoY in 2024. Among them, the shipment area of 300mm semiconductor silicon wafers is expected to increase slightly by 1.4% compared to the previous year, while the shipment area of 200mm semiconductor silicon wafers is expected to continue declining by 12.1% YoY. Meanwhile, the global semiconductor silicon wafer market size (including SOI wafers) is projected to reach $13.3 billion in 2024, representing a YoY decline of approximately 5.6%.

However, with the rapid development of emerging technologies such as 5G, artificial intelligence, and the Internet of Things, the demand for semiconductor chips is expected to continue growing, driving an increase in demand for semiconductor silicon wafers. According to SEMI forecasts, global semiconductor chip manufacturing capacity is expected to grow by 6% in 2024 and by 7% in 2025, reaching a record high of 33.7 million wafers per month (converted to 200mm).

Shanghai Silicon Industry operates in the upstream of the semiconductor/integrated circuit industry chain, focusing on the R&D, production, and sales of semiconductor silicon wafers and other materials.

A reporter from the "STAR Market Daily" noted that against the backdrop of inventory adjustments by downstream customers and declining silicon wafer prices, the company chose to expand its silicon wafer capacity.

During the reporting period, Shanghai Silicon Industry continued to advance multiple product upgrade and capacity expansion projects, including the Phase II project of Shanghai Xinsheng with a capacity of 300,000 wafers/month for 300mm silicon wafers, the R&D pilot project for high-end 300mm silicon-based materials, and the Phase III capacity upgrade project for 300mm silicon wafers for integrated circuits.

In terms of key project progress, according to the company, Shanghai Silicon Industry is accelerating the construction of its 300mm silicon wafer capacity upgrade projects for integrated circuits in Taiyuan and Shanghai. Upon completion, the company's 300mm silicon wafer capacity will increase by 600,000 wafers/month, reaching 1.2 million wafers/month.

The total investment for this project is estimated at 13.2 billion yuan, with the Taiyuan project accounting for approximately 9.1 billion yuan, aiming to build a crystal pulling capacity of 600,000 wafers/month (including heavily doped wafers) and a slicing, grinding, and polishing capacity of 200,000 wafers/month (including heavily doped wafers). The Shanghai project involves a total investment of 4.1 billion yuan, aiming to build a slicing, grinding, and polishing capacity of 400,000 wafers/month.

Shanghai Silicon Industry stated that this capacity upgrade responds to the national semiconductor industry development strategy, accelerates the company's long-term strategic planning, seizes development opportunities in the semiconductor industry, continuously expands the production scale of 300mm silicon wafers for integrated circuits, and enhances the company's global silicon wafer market share and competitive advantage.