The International Semiconductor Industry Association (SEMI) reports that benefiting from government funding and other incentives, Chinese chip manufacturers are expected to launch 18 new wafer fabs in 2024. China is expected to expand its share of global semiconductor production capacity, which also means that This year’s wafer production capacity will explode, and it is likely to be a mature process.
Logically speaking, a large increase in production capacity in a certain production area will affect supply and demand, and prices are expected to fall. However, industry insiders believe that considering geopolitics, this may not necessarily be the case in the past.
First of all, even if China opens up production capacity, because the global supply chain is being reshaped, investing in China means taking on more geopolitical risks and cannot only consider price. Therefore, the price reduction and dumping effect caused by oversupply may not necessarily occur. China Excess capacity may also lead to idleness.
On the other hand, the production capacity of China’s semiconductor industry has increased sharply. If it is difficult to win orders from external customers, it will have no choice but to turn to China’s local consumer electronics brands. However, China’s economic prospects are uncertain, and it will inevitably have to bargain to grab orders, and there may also be an “involution” situation. .
Industry insiders familiar with IC design believe that China’s production capacity affects the global semiconductor supply chain, but it also faces orders from European and American customers. This incident will also increase the bargaining power of IC factories.
In fact, wafer foundry manufacturers have been facing price reduction pressure since last year, and there are even rumors that Taiwanese factories will reduce their mature processes by 30%. So far, there are no signs of relief. As for what the market is most concerned about is when the semiconductor market will recover or even strengthen, there is no clear recovery force yet. According to industry insiders, there may not be signs of recovery until the third or even fourth quarter.
Lu Xingzhi has also expressed his views on the issue of China’s mature process production capacity, saying that the upward cycle of Taiwan’s mature process wafer foundry cannot increase prices as strongly as before, and that structural damage may be offset by the U.S.-led de-China process. Most of it. For Chinese wafer foundries, China’s semiconductor demand is still greater than supply, but the market growth space has been greatly squeezed. In the future, price-cutting competition among manufacturers will occur frequently, seriously damaging the profit structure and cash flow.
Lu Xingzhi believes that although Taiwanese or foreign foundries have lost mature process foundry orders from Chinese design customers, they have also obtained orders from non-Chinese markets. They can avoid mature process foundry orders in some Chinese markets through product and customer repositioning. price war.
The United States may intensify the U.S.-China trade war
However, from the perspective of the overall environment, the current price reduction pressure continues. Samsung Foundry has reported that it will follow up with price reductions of 5% to 15% in the first quarter. Microchip, a major American microcontroller (MCU) and analog IC manufacturer, also revealed that automotive and consumer The market conditions in sexual electronics and other fields continue to be sluggish, indicating that the market conditions for mature processes are sluggish.
U.S. Commerce Secretary Gina Raimondo has warned that China’s aggressive subsidy policies, especially the large investment in mature process chips, may lead to an oversupply of related chips. The United States and its allies must integrate external export controls and internal incentives. , to deal with the oversupply problem. Semiconductor supply chain industry players believe that manufacturers with lower technology levels will face challenges from China’s internal support manufacturers. Taiwanese manufacturers will also have to adjust their strategies in response to Sino-US relations. China’s actions may also accelerate the intensity of the United States’ implementation of the Sino-US trade war with stricter requirements. .
In addition to the increase in mature production capacity in China, SEMI also predicts that global semiconductor production capacity will grow by 6.4% in 2024, exceeding the 30 million piece mark. During the forecast period from 2022 to 2024, the global semiconductor industry plans to have 82 new facilities put into production. In 2023 and 2024, 11 and 42 new facilities will be put into production respectively, covering 4 to 12-inch wafer production lines.
(First image source: shutterstock)
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2024-01-11 10:15:40
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