It is said that the supply and demand of wafer capacity is very tight, so how exaggerated is it? MediaTek really brought us a long experience.
On October 30, the IC design company MediaTek issued an announcement that it purchased a batch of equipment and purchased semiconductors from Lam Research, Canon Co., Ltd., and Tokyo Weili Technology Co., Ltd. for NT$1.62 billion. The equipment is mainly used for renting to downstream foundries.
Among them, Colin R&D is an American semiconductor equipment manufacturer that provides process equipment such as film deposition, plasma etching, photoresist removal and wafer cleaning required for chip mass production. It ranked fourth in global semiconductor equipment in 2019.
Tokyo Velocity Technology mainly supplies semiconductor film forming equipment, semiconductor etching equipment and equipment used to manufacture flat-panel Display liquid crystals. In 2019, it ranked third in the world for semiconductor equipment.
As an IC design company, MediaTek does not have its own fab. This time, it even bought equipment out of its own pocket and placed it in the fab to ensure production capacity. This is rare in the industry, and it highlights how serious the shortage of 8-inch wafer foundry production capacity is this year.
MediaTek’s special purpose
It is understood that MediaTek’s equipment rental is for foundry power Semiconductor Manufacturing Co., Ltd. According to data from research institutions, Power Semiconductor Manufacturing Co., Ltd. ranks 7th in the world’s top ten wafer foundries in terms of revenue in the first three quarters. The main purpose of MediaTek’s purchase of equipment for lease to Power Semiconductor Manufacturing Co., Ltd. is to consolidate demand for production capacity.
According to Mantianxin, in the first half of 2020, MediaTek placed an order for 3,000 12-inch power management IC wafers per month to Power Semiconductor Manufacturing Co., Ltd. After entering the second half of the year, the number of orders quickly rose to 7,000 pieces per month, and the number of orders doubled and grew, still unable to meet the needs of customers. With the rapid heating up of 5G demand, it is expected that by 2021, the number of MediaTek’s power management ICs will double again.
Since power management ICs are mostly manufactured using 8-inch wafers, 12-inch wafers are rarely used for production. However, due to the DRAM production technology of Power Semiconductor Manufacturing, its 12-inch aluminum process capacity is more suitable for mass production of power management IC technology. In the case of a critical shortage of wafer capacity, MediaTek will make this strange move to consolidate future power management IC production capacity.
Foundry capacity in short supply
Since entering the second half of this year, the foundry capacity has begun to be tight, and the development has become more intense now.
According to statistics from Tianxin, Taiwanese foundries such as TSMC, UMC, World Advanced, Power Semiconductor Manufacturing Co., Ltd. have been fully booked in the fourth quarter. In the first half of next year, the advanced process and mature process capacity have been fully booked by customers.
On the mainland side, SMIC has already embarked on large-scale production expansion; China Resources Micro, Hua Hong Semiconductor and other manufacturers have indicated that the 8-inch wafer production line is fully operating.
The original production capacity is not rich, and recently a large number of automotive chip orders have been released to seek support from foundries, and the tight capacity situation has become more serious.
The chip delivery period will be extended by another 2 to 4 weeks. Some chips have been delivered for more than 40 weeks, and the price increase is already on the line.
Chip product rally formation
At the beginning of the second half of the year, upstream IC design factories and IDM factories began to negotiate with customers to increase chip prices on the grounds of passing on costs. Among them, the panel driver IC, power management IC, and MOS tube have already adjusted their prices, with an increase of 10% to 20%.
Last week, Mantianxin has sorted out the recent price increases of chips on the market, and a list of out-of-stock price increases! ST, Microchip, HiSilicon, Xilinx, Fuman Electronics. . . . . .
Entering the fourth quarter, orders from mobile phone factories and ODM/OEM factories have only increased, and the prices of foundry and packaging and testing have increased, and the chip delivery period has been further lengthened. Although the inventory level of the supply chain has increased a lot, the order volume of chip factories is still significantly greater than the supply, and the supply of foundry and packaging and testing capacity is in short supply. The industry has a consensus that chip prices will increase in the next two quarters.
At present, panel driver ICs, power management ICs, MOS tubes, etc. have determined to increase prices by 10-20% in the first quarter of next year, and price increases for CMOS image sensors (CIS), MCUs, and WiFi chips have taken shape.