Yesterday, a news that the Market Supervision Administration conducted an investigation into a dealership suspected of driving up and speculating on the price of auto chips, which shocked the entire semiconductor industry. Although the impact of the incident is indeed bad, it also reflects the current tightness of the semiconductor market, as well as the seriousness of shortages and price increases.
After all, in the current global semiconductor supply chain market, almost all chips and components are out of stock to varying degrees. From the most basic silicon wafers, packaging materials, PCB substrates to CMOS, MCU, MOSFET, PMIC and other devices, they are currently hot products in the market. What is the real situation of these semiconductor markets? Let’s check it out:
1, silicon wafer
Since each chip requires wafers to be produced, the current silicon wafer market is currently very tight. For example, Taishengke’s 8-inch and 12-inch silicon wafer orders have been fully loaded by the end of the year. In the third quarter of Hejing, 6-inch and 8-inch silicon wafer orders are also fully loaded.
In order to cope with the continued tight supply of wafers, the quotations of the silicon wafer products of the third quarter of Hejing will be increased by more than 10%. Taishengke’s 12-inch silicon wafer quotations will also be adjusted upwards, the same as the industry. In addition, industry insiders expect that the third quarter revenue and profit of Hejing and Taishengke are expected to rise simultaneously.
In addition, in the field of foundry, there are also certain adjustments. At present, the production capacity of wafer foundry is most tight with mature processes. The quotations of UMC and Power Semiconductor Manufacturing Co., Ltd. have soared. The world’s advanced products have also increased to a certain extent. “Slight increase, but considering the market demand is too strong, IC design industry previously revealed that TSMC’s foundry prices have been finalized early next year, and the prices of some mature 8-inch and 12-inch processes have risen by 10 to 20%, and 12-inch processes have increased. More than 8 inches.
The supply chain also revealed that World Advanced, which also focuses on mature processes, has previously notified customers that it has raised prices by about 5% since July. This is the company’s second increase in this year; There were two waves of price increases on 1st September, and the rate of increase moderated slightly on 1st September, but another wave rose in the first quarter of 2022. It is reported that the 40-nanometer process will increase by about 10% to 15%, and the other processes will increase by about 5% to 10%.
2, packaging materials
Recently, according to industry reports, OSAT is expected to increase the price of wire bond packaging again in the first half of 2022 to reflect the rising cost of materials such as lead frames and molding compounds due to increasing shortages.
DIGITIMES quoted sources as saying that many OSATs have increased their wire-bonding quotations in the first half of 2021 to cope with the increase in packaging material prices. Most of the OSAT promises that they will not continue to increase prices in the second half of the year, but will cancel the service fee discounts during peak seasons.
In view of Malaysia’s lockdown measures to prevent and control the spread of the new crown epidemic, many local material manufacturers have been reducing production capacity, resulting in a continuous increase in the price of lead frames and molding compounds in July. According to sources, OSAT will have no choice but to increase its offer and pass on part of the cost increase to customers in the first half of 2022.
According to it, although the sales of TVs, laptops and other consumer electronic products may be adjusted in the fourth quarter of 2021, OSAT, including ASE, Chaofeng Electronics, Lingsheng Precision and Taiwan Model, will be the first in 2022. The quarterly production capacity for wire bonding packaging used to process various MCUs, PMICs, T-Con chips and USB interface ICs has been booked out.
3, PCB
According to data released by the TPCA (Taiwan Circuit Board Association), the PCB output value of Taiwanese companies in the first quarter of this year reached 6.108 billion US dollars, a record high in the first quarter of the year, an increase of 26.7% over the same period last year. Taiwanese companies accounted for about 63.2% of the mainland’s production. , The output value of the second quarter is estimated to reach 6.2 billion US dollars.
In addition to the growth and decline of the rigid-flex board due to the impact of AirPods’ changes in product design, Taiwanese companies’ flexible boards, multilayer boards, and HDI (high-density interconnect) boards all have a growth rate of more than 20%. TPCA believes that this is due to the benefits of the high-end 5G mobile phones, the trend of remote office and teaching driven by the epidemic in the notebook market, and the improvement of the global automotive market.
But at the same time as the performance growth, PCB manufacturers have also started the price increase mode. For example, Shenghong Technology stated on the interactive platform that the company’s PCB products follow the principle of market-based pricing and will consider market supply and demand, raw material price fluctuations, etc., and negotiate pricing with customers. The current increase in raw material prices may cause the company’s product prices to rise.
The rise in raw material prices is the main driver of this round of price increases. This scene is very similar to the situation in 2018. It was also because the supply of copper foil was in short supply that year, the prices of various raw materials continued to rise.
For example, the price of upstream materials for copper clad laminates has risen across the board since last year. According to the research report of Minsheng Securities, the price of LME copper has increased by nearly 90% from April 2020 to the end of the first quarter of this year; the price of epoxy resin has increased by more than 55% since Q3 of 2020; and the current price of electronic fiberglass cloth has been higher than that of 2020. In the first half of the year, 3.7 yuan/meter increased nearly doubled. The CCL supply chain revealed that copper foil is now in a state of serious shortage of supply, and the delivery time has been continuously extended, and the price increase has also been wave after wave. Moreover, the prices of important PCB raw materials, such as copper foil, glass cloth, resin, and related chemicals, are increasing by as much as 30-100%, which affects the price increase of the entire PCB industry.
4, MCU
MCU is currently a popular application on the market. The demand from mature 8-inch technology nodes to mainstream 12-inch technology is very strong. MCU is one of the key applications that promote the growth of mainstream 40-nanometer and below technologies.
However, current MCU suppliers cannot keep up with demand. Semico’s Feldhan said: “The shortage of MCUs continues, and the demand for MCUs began to increase in the second half of 2020. Since then, the average selling price (ASP) of MCUs per All quarters are increasing. We expect shipments in the second quarter of 2021 to drop by 1%, while the average selling price is expected to increase by nearly 5%. The supply of 32-bit MCUs does seem to be the tightest, and its average selling price has increased last year More than 20%. Even the relatively old 4-bit MCUs are currently in demand. The unit sales of 4-bit MCUs have increased significantly. Although 4-bit MCUs only account for less than 1% of the total shipments, in 2021 In the first five months, the sales of 4 MCUs have increased by more than 400% compared to 2020.”
And recently, MCU factory Shengqun held a French talk on July 26. Vice President Cai Rongzong said that this year’s production capacity has been roughly negotiated with the foundry, and the orders are full. Next year’s production capacity will increase slightly compared with this year. By the end of the month, 60-70% of production capacity has been booked, and the market conditions next year are estimated to be the same as this year. The company raised product prices by 15% for the first time in April, and expects to raise prices by 10-15% again in August.
Shengqun’s MCU revenue in the first half of the year reached 2.428 billion yuan, an increase of 28% year-on-year, and the revenue proportion reached 78%. Benefited from the MCU peak season and price increases, Holtek’s gross profit margin in the second quarter reached 51.2%, a record profit. The net profit after tax in the second quarter was 513 million yuan, an increase of 48% from the previous quarter and an increase of 115% from the same period last year. The rise of MCU market prices.
5, aluminum electrolytic capacitor
Due to the soaring demand on the one hand, and the outbreak of the epidemic in the production base on the other hand, the aluminum electrolytic capacitor market has been shocked recently. In fact, as early as March this year, a large number of major manufacturers led by Ruby and Kaimei announced to increase the price of aluminum electrolytic capacitors, and then Aihua Group and Jianghai shares followed suit, and aluminum capacitors formed a wave of rising trends.
Nowadays, the price hike has started again. As the epidemic situation in Malaysia has not shown signs of improvement, the number of confirmed diagnoses in a single day has erupted. The market expects that the complete blockade will be difficult to lift in the short term. Although companies can maintain six people to work, the production capacity of related manufacturers is still restricted, which makes the Malaysian factories large. Large-scale production was forced to stop.
Therefore, the world’s top three aluminum electrolytic capacitor suppliers, Jiamei, Nichicon, and Ruby, have increased the originally planned price increase of 9% to 12% to 10% to 15%. The main reason is that the epidemic has caused capacitor production capacity. Damaged.
At the same time, the price of raw materials is also rising. For example, the production cost of the most important aluminum foil accounts for 30%-60% of the total cost of aluminum electrolytic capacitors. Since bulk commodities have soared since the second half of last year, LME aluminum has In May, it set a new high in the past two years. Although it has fallen since then, it is still consolidating at a high level. As of the close of July 23, LME aluminum was quoted at US$2508.5/ton. This has undoubtedly brought pressure to increase costs for aluminum electrolytic capacitor manufacturers.
6. Semiconductor equipment
Recently, according to global semiconductor company data collected by Korean semiconductor companies and TheElec, as of July, the average delivery cycle of semiconductor equipment has been extended to 14 months, and the delivery time of some fab equipment has exceeded two years. The extension of the delivery period is due to chip manufacturers’ increased spending on their fabs, as well as the prolonged global chip shortage, and even equipment manufacturers have to purchase the chips needed for their products.
As of July, the delivery time of ASML’s ArF equipment is 24 months, I-line equipment is 18 months, and extreme ultraviolet equipment is 18 months. Disco, a manufacturer of wafer dicing equipment, has a delivery time of 12 to 15 months. Equipment to produce 8-inch (200 mm) wafers is particularly in short supply. This is because, due to insufficient production capacity, orders for them have increased significantly. It is reported that the current delivery period of KLA’s (KLA) measurement and inspection equipment (overlay equipment) is 14 months, and the delivery periods of Ebara and Applied Materials are 14 months and 13 months, respectively.
The extension of the delivery period has also led to an increase in the demand for second-hand factory equipment because of their relatively short delivery period. Especially the demand for 8-inch second-hand equipment is increasing sharply. Market research company VLSI research said that in the first half of 2021, the price of second-hand equipment rose by an average of 20% over the previous year.
Summary:
According to the current situation, the Delta virus will continue to ravage the world. Although countries are currently working on new solutions, they still cannot stop a localized outbreak. The semiconductor market in the post-epidemic era will still focus on shortages and price increases, but even in this context, it is still impossible to blindly drive up prices and cause chaos in the market. After all, blindly seeking petty gains will ultimately lose the market order of the entire industry and bring more disasters to the overwhelmed semiconductor industry chain.