Is there a shortage of 8-inch wafers, expanding production or looking for alternatives?
The “butterfly effect” caused by commodity shortages is continuing to ferment in the semiconductor industry.
Since the second half of this year, due to insufficient 8-inch wafer production capacity, news about price increases and shortages of MOSFETs, driver ICs and power management ICs has been rampant.
Under the impact of commodity shortages, Apple, the industry benchmark, has also been affected. Due to the shortage of power management ICs in the iPhone 12’s 20W PD fast charging, and Apple’s cancellation of the included charger, the demand for fast charging has surged, and the fast charging chip market has also caused a huge impact.
Why is the fast charging chip out of stock?
“It is difficult for a smart woman to cook without eating rice.” The shortage of 8-inch wafer production capacity has hindered the explosive growth of demand for fast-charging chips.
In the first half of this year, affected by the epidemic, demand in the entire consumer electronics market declined, and market sentiment was pessimistic. The Sino-US trade war broke the global chip supply pattern. Since the second half of this year, the demand for 5G mobile phones, notebook computers and automotive electronics has increased. Due to the limited production capacity of 8-inch wafers, the demand for production capacity has risen sharply.
According to related reports, foundries such as TSMC, UMC, Advanced Semiconductor Manufacturing Co., Ltd., and Power Semiconductor Manufacturing Co., Ltd. have completed orders in the fourth quarter. In the first half of next year, all advanced and mature technological capabilities have been booked by customers.
In addition to the lack of 8-inch wafer capacity resulting in insufficient chip capacity and insufficient inventory, the strong market demand driven by PD fast charging has also exacerbated the storm of fast charging chip shortage.
With the cancellation of accessories such as Apple’s iPhone 12 chargers and earphones, and the high prices of original accessories, many consumers have chosen third-party authorized brand products. While bringing new dividends to the fast charging market, PD fast charging chips have also become the main force in this round of fast charging chip shortages.
According to related reports, Taiwanese companies such as Tianyu Technology, Weiquan Electronics, and Tongjia Technology have completed their fast-charging chip orders until the second quarter of next year.
At the same time, the situation of mainland fast-charging chip manufacturers and solution providers is equally tragic. The scheduled delivery time of fast-charging chips has exceeded 3 months.
“Compared with the price of original Apple accessories, the price advantage of third-party accessories is also more attractive to consumers. 20W PD fast charging has been a dessert for some time, and now not many companies can maintain delivery .” Industry insiders said. “With the surge in orders, even if you can deliver, the delivery of finished products will inevitably be delayed.”
Under this influence, the iphone12 series has also been removed from the shelves before. Even if it is re-launched later, its delivery time will be extended by nearly a month, which also supports the rumors that the fast charging chip is out of stock.
Speaking of when the shortage of fast charging chips will be reversed, industry insiders said frankly: “The shortage of chips in the first half of next year will not be alleviated.”
It is worth noting that, in the shadow of the current shortage, some Taiwanese manufacturers also said that the actual supply and demand of chips is unknown, which has also caused the industry to worry about the possibility of supply and demand reversal. For 8-inch wafers, whether it is necessary to expand production, or whether it can be replaced with 12-inch wafers, has become a new thinking after this series of events.
The supply of 8-inch wafers exceeds demand. Is it possible to expand or seek replacement?
From the perspective of semiconductor application classification, analog circuits include radio frequency chips, fingerprint recognition chips, image chips, power management chips, etc., basically using 8-inch wafers. Among them, power management chips account for the largest share of analog chip types, accounting for about 53%, and the demand for wafers is self-evident.
Since the second half of this year, the 8-inch wafer manufacturing peak season is approaching, the demand for production capacity has intensified, and the industry has begun to experience price increases and extended delivery periods.
An industry insider said frankly: “Due to the impact of the epidemic and Huawei’s ban in the first half of this year, some chip OEMs have become more cautious in terms of capacity reserves. Since the second half of the year, driven by the iPhone 12, demand in the fast charging market has surged. Insufficient wafer production capacity and manufacturers’ lack of wafer inventory capacity are limited by these problems.”
It is foreseeable that some capacity shortages in the industry chain have been transferred to terminal chip manufacturers and are still increasing. From the perspective of supply, the capacity supply for 8-inch wafer manufacturing is also in short supply on a quarterly basis. In this case, how to alleviate the pain of insufficient wafer production. In terms of production capacity, there are rumors in the industry that UMC intends to acquire Toshiba’s two 8-inch wafer fabs in order to achieve production expansion, but it has also been denied.
Industry insiders also revealed that in the case of unbalanced supply and demand of 8-inch wafer capacity, many foundries will screen orders, adjust their product mix, and give priority to the production of high-margin products, and the demand for expansion is not too strong.
At the same time, the current 8-inch equipment has been discontinued, and the manufacturing equipment is relatively short, which is one of the reasons why the production capacity is difficult to expand.
In addition, in recent years, the number of 8-inch wafer fabs and production lines has gradually decreased. Given the contradiction between limited expansion of production lines and increased demand for chips, whether 12-inch wafers can replace 8-inch wafers in the field of fast charging chips is a question. It has become a new idea to alleviate urgent needs.
“From 6 inches to 8 inches to 12 inches, the larger the wafer area, the more chips can be produced, which can reduce costs and increase yield. But overall, the current 8-inch wafers are the most cost-effective, The capacity is the best and the cost is the highest.” Industry insiders analyzed.
“At present, Japan, Israel and other fabs are preparing to replace 8-inch wafers with 12-inch wafers to ease the shortage of wafer capacity. But in fact, for domestic equipment factories, invest in a 12-inch wafer Factory, starting at 200 million or 300 million US dollars, in terms of cost performance, it is currently more difficult, so the possibility of future replacement is also greater.” Industry insiders added.