According to reports, SMIC, a leading domestic chip contract manufacturer, informed its customers by e-mail that prices will be increased across the line from April 1, orders that have been launched will maintain the original price, and orders that have been issued but not online, regardless of the time when the order was issued and the proportion of payment, will be implemented at the new price.
Industry chain personages pointed out that in fact SMIC began to raise prices in March this year, the price range varies from customer to customer, and the increase in 8-inch and 12-inch orders is different. Overall, the price increase is about 15% to 30%.
The industry chain said that on a global scale, SMIC's price rise is relatively late, and most customers will understand.
However, SMIC's promise that "price increases are limited to new orders" is still ringing in our ears. Prior to this, on February 5, in response to the "product price increase" on the performance conference call, SMIC said that the market situation had changed, and the price increase had been discussed with customers. For the allocation of production capacity, some customers will be required to pay a deposit first, but the company will abide by the spirit of the contract and ensure that it will not change. The contracts previously signed, especially SMIC's long-term customers and strategic customers, will still be carried out in accordance with the contract.
The tide of shortage and rising prices continues to ferment.
Since the beginning of 2021, the upward cycle of accelerating demand and shortage of wafer capacity is still under way.
Following the 8-inch wafer, TSMC's 12-inch wafer will also rise in April, with a wafer increase of about US $400 per wafer. It is also reported that TSMC will raise the OEM price of the driver chip from April, and the rising price trend of the driver chip will be further escalated. The prices of semiconductor products from United China Electronics and LSMC are also expected to rise by 10% in April.
On the other hand, due to the shortage of production capacity in wafer foundries and closed test plants, semiconductor foundry, closed testing and finished products such as power, MCU, power management and so on have increased.
According to the supply chain, Taiwan MOSFET companies Dazhong, Fuding and Nixon have the earliest opportunity to start raising their bids in the second quarter, an increase of 10 per cent and 20 per cent. Sheng Qun, a big MCU manufacturer, has also notified customers that it will raise the prices of all chip products by 15 per cent in April this year. Wei Xiandian, a big fast-charging chip manufacturer, also said that in order to reflect the increase in costs, the full product line, including the power management chip (PMIC) and the microcontroller (MCU), will increase prices across the board from April 1st, an increase of about 10-20%.
Analyst: the first quarter results are expected to realize the logic of price increase. Long term, it is expected to accelerate the localization of semiconductors.
The effect of price increases has been reflected in the results of leading manufacturers in February.
TSMC achieved revenue of NT $106.534 billion in February 2021, an increase of 14.07% over the same period last year, and reached an all-time high in February. UMC posted revenue of NT $14.948 billion in February, up 9.86 per cent from a year earlier.
In addition, the revenue growth rates of storage companies South Asia Branch, Huabang Power and Wang Hong in February were 26.91%, 73.25% and 8.48%, respectively. The revenue of Nikko, a closed test company, grew by 30.16% in February compared with the same period last year. Revenue of power semiconductor companies Hanlei and Qiangmao grew 26.76% and 65.25% respectively in February compared with the same period last year.
Great Wall Securities Zou Lanlan team released a research report on March 20, said that the semiconductor industry chain capacity tension continued from the second half of 2020 to now, 2021 Q1 multi-link prices officially increased on a large scale, wafer foundry, packaging, materials, storage, power and other links of enterprises are expected to benefit comprehensively, it is expected that Q1 in 2021 due to the price increase effect, the performance of semiconductor manufacturers is good.
Analysts Luo Fan and Lu Zhiqi of China Merchants Securities said in a research report on April 1 that in the short term, contract factories and closed test plants may be the first to benefit from the tight supply situation, while designers need to focus on whether they have the ability to give priority to wafer capacity. Domestic design companies previously considered as low-end products may have new development opportunities in the current out-of-stock situation. In the medium term, the relief of capacity shortages depends on the capital expenditure of fabs, and semiconductor equipment and material manufacturers are expected to benefit from global wafer capacity expansion and localization.
In the long run, the shortage of production capacity is expected to accelerate the trend of localization of the semiconductor industry, whether in the equipment, materials, contract manufacturing and other links of the industrial chain, or from the subdivision of products such as power semiconductors, simulation, radio frequency and other fields.
