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Silicon wafer customer pull delays, wafer foundry picks up in the second quarter

1. The spot price of silicon wafers has dropped, and long-term customers have delayed purchasing goods

According to the Taiwan Economic Daily quoted by IT House, the demand for downstream electronic product applications is sluggish, and the upstream supply chain is also affected. From the perspective of the overall silicon wafer market, the current long-term contract price has not been loosened, but there have been many cases where long-term contract customers have delayed purchases. Later to the second half of the year, the deferred product range includes 8-inch and 12-inch wafers.

In terms of spot prices, the price of silicon wafers below 6 inches has been revised; the quotations for a small number of 8-inch silicon wafers have been slightly revised down; some customers have also requested from the silicon wafer factory that the quotations for 12-inch silicon wafers should also be adjusted, and are negotiating stage. Silicon wafer manufacturers look forward to a smooth market recovery in the second half of the year, and long-term contract customers will make up for the insufficient volume in the first half of the year, so that the annual volume of shipments will remain unchanged.

2. Wafer foundries need to wait until the second quarter to recover, and packaging and testing will be later

According to China Taiwan Electronics Times, some first-line logic IC and memory packaging and testing manufacturers have gradually started or extended the “vacation without layoffs”. The capacity utilization rate of wafer and fabs has declined.

The recent chip volume of the packaging and testing end has shrunk significantly with the decline in the market conditions of 3C and IT terminals. The industry expects that the wafer foundry end will have a more obvious recovery in the second quarter, and the production process will be delayed by another quarter for the packaging and testing end. , I am afraid that after the third quarter.

3. The demand for memory has declined, and South Korea’s imports of wafers from Japan have dropped significantly year-on-year

According to foreign media reports quoted by TechWeb, due to the reduction of imports by Samsung and SK Hynix, the two major storage manufacturers, South Korea’s wafer imports from Japan fell to US$203 million in the fourth quarter of last year, a year-on-year decrease of 26.66%. Affected by deteriorating market conditions, the inventories of Samsung Electronics and SK Hynix are increasing rapidly, and the current inventory level has exceeded 20 weeks, much higher than their usual 5-6 weeks.

Other memory chip makers cutting production include Micron, Kioxia and Western Digital. Micron has decided to reduce their production to 80% of last year, and Kioxia has reduced production by 30% since October last year. And these manufacturers’ demand for wafers is bound to decrease, and the supply of related wafer manufacturers will also decrease accordingly.

4. The destocking process of the semiconductor industry affects the recovery trend

According to Kechuang Daily, Taiwan Economic Daily, China, industry insiders believe that in terms of TSMC’s customer inventory, ultra-large-scale brand factories have established long-term production plans, and some IC design companies have destocked in advance in the second half of last year. It is expected that the number of inventory days in the first half of the year will gradually recover. Normally, IDM factory terminal application upgrades and other factors have led to an increase in outsourcing orders. The overall situation is beginning to help TSMC’s operations return to the growth track in the second half of the year.

5. Guangzhou: Increase the localization rate of core components such as automotive-grade chips and power batteries

According to a report from the Financial Associated Press on the 14th, the Guangzhou Municipal People’s Government recently issued “Several Measures on Supporting the High-quality Development of Market Subjects and Promoting the Overall Improvement of Economic Operations”, and issued a medium- and long-term development plan for the automobile industry to fully utilize the 30 billion yuan automobile industry and The role of the spare parts industry development fund will build a “432” automobile industrial park near the local area, and increase the localization rate of core parts such as automotive-grade chips and power batteries.

6. The European Parliament passed the ban on the sale of new fossil fuel vehicles in 2035

According to TechWeb citing foreign media reports, on Tuesday local time, the European Parliament passed a new decree to ban the sale of new gasoline and diesel cars from 2035, which is part of the EU’s efforts to combat climate change. The new decree further stipulates that new cars sold from 2030 will emit 55% less CO2 than in 2021, well above the current target of around 37%, while vans will reduce emissions by 50%.

It is reported that negotiators from the European Parliament and EU member states reached an agreement on October 27, 2022. From 2035, the EU will ban the sale of new cars with internal combustion engines. The new law has now been approved by the European Parliament. Next, the decree will be submitted to the European Council for approval, and final approval is expected to be obtained in March this year.