The prices of silicon wafer, which have been maintained at a high level, showed signs of falling recently. According to media, the spot prices of silicon wafers have recently begun to fall, which is the first time in more than three years, mainly involving 6 inches, 8 inches, and 12 inches.
The most direct reason is that the downstream customers hold excessive inventories. Some silicon wafer manufacturers said that as early as the fourth quarter of 2022, the capacity utilisation rate of their clients have dropped significantly. Now that the inventory held by the clients is too high, it is necessary to destock. The silicon wafer inventory held by some OEMs has been as high as five or six months, which is way "too much". Of course, they will not want to buy more goods or even ask for bargaining.
Silicon wafer is the main raw material for semiconductor OEMs. When the chip industry boomed, silicon wafer factories continued to expand the production, and OEMs hoarded a large number of wafers.
In the first quarter of 2022, silicon wafer was still in short supply in the semiconductor industry chain. At that time, Global Crystal, the world's third largest semiconductor-oriented silicon wafer factory, even stated that its forward production from 2022 to 2024 has been sold out. The International Semiconductor Industry Association SEMI predicts that global silicon wafer shipments would reach a record high of nearly 147 million square inches in 2022.
Today, the hidden risks brought about by "excessive hoarding" have finally been revealed. In the case of continued weak demand for end products, the decline in the spot prices of silicon wafers is the result of ripple effect.
It is understood that for 6-inch silicon wafers, which now faces the weakest demand, the spot prices have dropped the most this quarter, with a drop of about a single-digit percentage. The prices of 8-inch silicon wafers have not changed much on average. Spot prices for 12-inch silicon wafers are relatively stable, but the industry said that the clients have requested price reductions, and intensive negotiations are under way.
