Long-term capacity difficult to satisfy near thirst second-line semiconductor foundry "rising sound" four TSMC canceled order discounts

Today, Taiwan media reported the news of price increase in wafer factory Q3. In addition to United Power, which has always led the trend of price increase, SMIC, Lattice (GlobalFoundries), world advanced semiconductors, Ligan and other contract factories are also on the list of price increases. The price increase is designed to deal with the continuing shortage of production capacity in 8-inch and 12-inch wafer factories, and the price increase will be higher than the increase in the first half of this year, the source said.

On the other hand, the industry leader TSMC has also cancelled all discounts for this year's new orders and next year's orders, although there is no price increase, it is also better than a price increase.

The person familiar with the matter also pointed out that customers lined up one after another to wait for foundry production capacity, with 8-inch wafer foundry being the top priority for customers to keep an eye on.

Affected by the news, the shares of A-share semiconductor leader Shilan Wei and SMIC rose in the afternoon, up 5.45% and 1.96% respectively by the end of the day.

Wafer foundry orders are full of manufacturers to meet the rise in volume and prices.

According to industry analysis, as the new capacity will not be released until 2023, wafer foundry will continue to be in short supply next year. Whether it is to take the initiative to compete for large orders or under pressure to have no choice, a number of contract factories have launched production expansion plans one after another.

TSMC, which had just announced that capital expenditure would reach US $100 billion over three years, recently decided to invest nearly NT $80 billion (US $2.863 billion) to expand mature process capacity at its Nanjing plant in China. Mass production is expected to begin in the second half of 2022 and 40, 000 pieces of monthly production capacity will be completed by mid-2023.

UMC also announced an investment of 100 billion New Taiwan dollars (23.2 billion yuan) to expand the capacity of the Fab 12A P6 plant. At present, the expansion plan has obtained the long-term cooperation commitment of eight major chip manufacturers.

At the beginning of the month, Shilan announced that it planned to invest 2 billion yuan to build a "new project to upgrade and expand the technology of 240000 12-inch high-voltage integrated circuits and power device chips per year." the first phase of the first 12-inch chip production line was officially put into production in December last year.

SMIC's quarterly results announced this month are eye-catching, with net profits more than doubling. Thanks to the capacity expansion of the Q1 200mm fab, the monthly production capacity has increased from 520750 8-inch wafers of Q4 last year to 540750 8-inch wafers of Q1 this year, with an energy production rate of 98.7%.

There are different opinions on the future development of the industry.

Under the magnificent demeanor of the industry, a number of research teams have been optimistic about the development of the industry.

Liu Shuangfeng and Lei Ming team of CITIC Construction Investment Co., Ltd. said in a research report last week that the semiconductor high-profile demeanor and tight supply and demand situation are expected to last until the end of the year, with full demand and shortages in all market segments. Among them, the 40nm process node has a lot of new demand, which is one of the most scarce nodes in the market.

Ping an Securities Research News also said that before the national science and technology system reform and innovation system construction leading group was held, the semiconductor industry was highly concerned by the national leadership, and in recent years, relevant policies have also been introduced intensively to boost the development of the semiconductor industry. Domestic enterprises' independent innovation capability will be further enhanced.

However, some people in the industry have pointed out that the situation may change in the future, and it is necessary to be cautious in expanding production.

The latest Gartner report predicts that the global semiconductor supply shortage will last throughout 2021 and return to normal in the second quarter of 2022.

Another analyst warned that the cost of building a new plant is high, and after the mature process capacity has greatly increased, once the economy reverses, the wafer foundry industry may face a crisis of idle capacity, resulting in huge investment damage.