Against the background of a serious shortage of mature production capacity in the world, the prices of second and third-line contract manufacturers are rising faster than those of leading manufacturers.
According to reports, according to reports from the supply chain, UMC recently issued another notice to customers to raise the wafer foundry price, with an average price increase of 10% in November, with an increase of 15% in some processes. This is the fourth time that UMC has raised its offer this year, and it is estimated that after the price increase this year, the cumulative increase has been more than 50%.
Leading TSMC has always said that it adheres to the relationship of trust with customers, in addition to providing customers with stable production capacity and services, will not rely on price increases to pursue a rise in gross profit margin. According to industry insiders, the price of TSMC 28nm will be suspended in the second half of the year after the previous slight increase. Some IC designers previously said that the contract price of UMC exceeded that of TSMC in the second quarter.
It is also reported in the supply chain that Xintang, the integrated components factory of the Huabang Group, raised its wafer foundry quotation in September, an increase of as much as 15%. While Xintang's main business is not wafer foundry, the company has a six-inch fab that produces its own brand IC, to provide wafer foundry services.
The second and third line foundry may continue to increase. According to Digitimes on Aug. 4, a number of wafer foundry factories in Taiwan are preparing to increase their prices for 8-inch and 12-inch wafers for mature processes by at least 5-10% by the first quarter of 2022.
Domestic contract manufacturers and downstream manufacturers have responded recently, confirming that the price increase of contract manufacturers has not yet reached the end.
Liandian can be regarded as the big winner of this wave wafer foundry mature process craze. The company's July revenue rose 5.9 per cent month-on-month to NT $18.366 billion, another record monthly revenue. UMC stressed that the current order visibility until 2022, it is expected that capacity utilization of more than 100% will continue to the end of the year, the fourth quarter does not rule out another price increase, this year's revenue will hit an all-time high quarter by quarter.
On August 6, SMIC said at the second-quarter results presentation that the increase in the company's gross profit margin in the second quarter mainly came from the increase in production capacity, product structure adjustment and price increases. At present, semiconductor manufacturers' capacity expansion and market delivery are relatively slow, and supply exceeds demand at least until the first half of 2022, and prices are expected to continue to rise in the third and fourth quarters.
Downstream display manufacturer Chau Ming Technology said in a survey by investors on August 9 that the overall drive IC is still relatively scarce, expectations for the product are still relatively conservative, do not rule out the possibility that prices may continue to rise in the future.
According to the Susquehanna Financial Group report, MCU shortages intensified in July, with delivery cycles reaching 26.5 weeks, compared with the previous 6-9 weeks.
MCU is also the protagonist of the missing core of the car. According to a research report by Fu Chuxiong, an analyst at China Galaxy on August 8, the General Administration of Market Supervision has filed an investigation into auto chip distribution companies suspected of inflating prices. The analyst said that this investigation is mainly aimed at hype and hoarding, and is mainly aimed at chip dealers. This governance is conducive to maintaining the healthy development of the automotive chip market and improving the transparency and binding force of upstream and downstream quotations. It is beneficial to the long-term development of upstream chip manufacturers and downstream automobile enterprises. The price increase of the current round of automotive chips is mainly caused by a better-than-expected recovery on the demand side and a long-term shortage of 8-inch production capacity on the supply side. Considering that the demand for automotive electronics will still grow at a high speed, it will take time for the release of 8-inch new production capacity. The tight supply and demand situation of the current round of chips will be maintained until 2022.
Xu Tao, an analyst at Citic Securities, said in a research report on August 8 that he recently learned that chip design companies and wafer factories have begun to communicate with 2022 production capacity, which is still in short supply. From the perspective of process capacity, SMIC and Huahong semiconductor process has made rapid progress, with the introduction of the new process platform and the improvement of operational efficiency, the company's ASP is expected to continue to improve.
Tianfeng Securities analyst Pan also said that overseas semiconductor performance guidance is high, wafer foundry is expected to continue to expand production in the next five years, strategically look at local wafer foundry assets, and continue to be optimistic about foundry valuation and repair opportunities.
