Uncover the history of global silicon wafer industry changes and its future focus!

1.1 Size change: Generational change creates opportunities for new entrants

As far as the semiconductor industry is concerned, chips are the most well-known and concerned area, while the fields of materials and equipment that play a supporting role in the industry are quite low-key. However, low-key does not mean unimportant. For example, the foundation of semiconductor manufacturing - silicon wafers, its position in the industry cannot be ignored.

Silicon wafers, also known as silicon chips, are important materials for making integrated circuits. Integrated circuits and various semiconductor devices can be made by photolithography, ion implantation and other methods. Monocrystalline silicon is a single crystal of silicon, a relatively active non-metallic element with a basically complete lattice structure. It has different properties in different directions and is a good semiconductor material. The purity requirement for photovoltaic-grade monocrystalline silicon is 99.9999%, while the purity requirement for semiconductor-grade monocrystalline silicon is even 99.9999999%. High-purity polycrystalline silicon can be prepared by the Siemens method, and then polycrystalline silicon is used as raw material to grow rod-shaped monocrystalline silicon from the melt by the Czochralski method or the floating zone melting method. Monocrystalline silicon wafers are mainly divided into 6 inches, 8 inches, 12 inches and 18 inches according to their diameters.

Driven by Moore's Law, the size of silicon wafers has changed from 6 inches to 8 inches to 12 inches. According to SEMI data, 4-inch silicon wafers were produced in 1986, 6 inches in 1992, 8 inches in 1997, and 12 inches in 2005. It is generally accepted in the industry that 4-inch silicon wafers were the mainstream in the 1980s, 6 inches in the 1990s, and 8 inches in the 2000s. In 2002, Intel and IBM first built 12-inch production lines. By 2005, the market share of 12-inch silicon wafers had accounted for 20%, and in 2008, its share rose to 30%, while the share of 8-inch silicon wafers had dropped to 54%, and the share of 6-inch silicon wafers had dropped to 11%.

According to SEMI's forecast, the market share of 12-inch silicon wafers will gradually increase, while the market share of 8-inch and 6-inch silicon wafers will gradually shrink. By 2020, the share of 12-inch silicon wafers will rise to about 80%, the share of 8-inch silicon wafers will drop to about 8%, and the share of 6-inch and below silicon wafers will drop to about 2%.

According to the product and quantity forecast of global 300mm (12-inch) and 450mm (18-inch) wafer Fabs, 300mm wafer Fabs will maintain their mainstream position in the semiconductor manufacturing industry in the next 15 to 25 years, so 300mm silicon wafers will continue to develop for at least the next 25 years. According to forecasts, 12-inch silicon wafers will reach their peak market share around 2022. Driven by Moore's Law, as the production technology of 18-inch silicon wafers gradually matures and the marketization process accelerates, 12-inch will transition to 18-inch.

But in fact, 18-inch (450mm) silicon wafers are still an unresolved issue for the global semiconductor industry. The key factor is that semiconductor equipment suppliers, including Applied Materials and other companies, lack the enthusiasm for research and development and production. The main reason is that the production of 450mm silicon wafers is not simply to enlarge the diameter of the cavity, but requires the redesign and manufacture of corresponding equipment. Faced with huge capital expenditures and the introduction of high-end technical talents, companies need to carefully consider whether the future market has sufficient return on investment in order to find a mature time to enter the market.

1.2 Regional evolution: Lessons from the rise of Japan’s silicon wafer industry

At present, the world's major semiconductor silicon wafer suppliers include Japan's Shin-Estu Chemical, Japan's Sumitomo Mitsubishi (SUMCO), Germany's Siltronic, South Korea's SK Siltron, and Taiwan's GlobalWafers and Wafer Technology. The global silicon wafer industry is highly monopolistic. According to statistics from IC insights, the global market share of the top five silicon wafer suppliers has reached 92%, of which Japan's Shin-Estu Chemical has a market share of 27%, Japan's Sumitomo Mitsubishi has a market share of 26%, Taiwan's GlobalWafers has a market share of 17%, Germany's Silitronic has a market share of 13%, and South Korea's LG Siltron has a market share of 9%.

In terms of market share, the silicon wafer market is basically monopolized by Japan, South Korea and Taiwan, especially Japan's SUMCO and Shin-Etsu, which have occupied about 60% of the market share in the past decade. As Taiwan's GlobalWafers and South Korea's LG Siltron have expanded their production capacity through mergers and acquisitions to give full play to the scale effect and seize the silicon wafer market, the market share of the two Japanese companies has declined in recent years.

By exploring the market share of global silicon wafer companies, we found that none of the top five silicon wafer manufacturers are from the United States. The United States, as a giant in the global semiconductor industry, is so weak in the field of silicon wafers. However, in fact, the silicon wafer industry was first pioneered by the United States. Raytheon and Monsanto were once leaders in the industry, but in the end, due to continuous losses in related businesses and unable to keep up with the times, they withdrew from the business one after another. By analyzing and exploring the historical background and reasons for the transfer of the semiconductor silicon wafer industry from the United States to Japan, we have a deep understanding of the historical laws of the development of the semiconductor silicon wafer industry.

Looking at the development history of the silicon wafer industry, in the past twenty years or so, the world's major silicon wafer suppliers have gradually merged from more than 20 to the current 5, forming an oligopoly market. The mergers and acquisitions of silicon wafer companies have their inevitable reasons. For silicon wafer manufacturers, facing huge capital expenditures, scale advantages are particularly important. Only through large-scale production can manufacturers reduce fixed costs and improve profitability; secondly, through mergers and acquisitions, manufacturers can increase market concentration and enhance the bargaining power of the industry chain to maintain relatively stable profitability.

SUMCO was formed by the merger of Sumitomo, Mitsubishi Materials and Komatsu in 2002 and 2006, while Shin-Etsu acquired Hitachi's silicon wafer company in 1999. GlobalWafers of Taiwan, China, acquired GlobiTech Incorporated of the United States in 2008, Covalent Silicon Corporation, a subsidiary of Covalent, the sixth largest Japanese company in the world, in 2012. In July 2016, it officially acquired the semiconductor division of Topsil of Denmark, and successfully completed the acquisition of SunEdison Semiconductor in December of the same year. Through a series of mergers and acquisitions, GlobalWafers has become the world's third largest silicon wafer manufacturer.

Another reason for US companies to withdraw from the silicon wafer industry is that the profit margin of the silicon wafer industry is relatively thin compared to the chip design downstream of the industry chain. By comparing the gross profit margins of Qualcomm (Fabless manufacturer) and Intel (IDM manufacturer), the representative companies in the US chip field, and SUMCO and Shin-Etsu, the leaders of the Japanese silicon wafer industry, we can find that the gross profit margins of chip companies are much higher than those of silicon wafer companies. From the perspective of economic benefits, the US withdrawing from the silicon wafer field and turning to higher-end chip design can bring greater benefits.

Based on this analysis, we believe that the transfer of the silicon wafer industry from its founding in the United States to the rise of Japan can be attributed mainly to two reasons: First, due to the inevitable trend of mergers and acquisitions in the silicon wafer market, the market began to form a high degree of monopoly and regionality; second, due to the high capital expenditure and technical difficulty of silicon wafer manufacturing, while the returns are very thin, with the process of globalization, the development trend of international division of labor and the vigorous development of the integrated circuit industry, American companies divested the mid- and low-end manufacturing and processing links and allocated them to emerging Asian companies, and chose to layout the more profitable chip design links.

2.1 Japan's semiconductor industry: germination, rise, and decline

From the perspective of the development process of the global semiconductor industry, it originated in the United States in the 1950s, and the first industrial transfer from the United States to Japan was completed in the 1970s and 1980s.

During the industrial transfer period, Japan, led by the government, and enterprises and research institutions worked together to achieve great technological achievements. With the advantages of cost and technology, Japanese enterprises took the opportunity to grow and expand rapidly. By the 1980s, Japan had occupied more than 50% of the global memory chip market share. By the 1990s, Japanese enterprises occupied six seats among the top ten semiconductor companies in the world. After the 1990s, with the second and third semiconductor industry transfers, Japan lost its technological and cost advantages, and its market share fell rapidly.

Buds: The rise of Japan's semiconductor industry started with memory, mainly DRAM (Dynamic Random Access Memory). In 1972, Japanese companies were able to produce 1K-bit DRAM, but the new system launched by IBM at that time required a 1M-bit product, which was 1,000 times larger than 1K-bit. Japanese companies were once in despair. In order to increase the capacity from 1K to 1M, the Japanese government adopted the "government-industry-academia" model and established the "Super LSI Technology Research Association" corporate consortium. The government allocated a large amount of funds to the semiconductor industry. In this process, Japan's semiconductor industry developed rapidly.

Heyday: By the 1980s, the era of memory and mainframes had begun. The rapid development of Japan's automobile industry and the global large-scale computer market led to a sharp increase in the demand for DRAM. At that time, Japan had already achieved technological leadership in DRAM. Japanese companies, relying on their large-scale production technology, gained cost and reliability advantages, and quickly penetrated the US market through a competitive strategy of low-price promotions, and quickly replaced the United States as the main supplier of DRAM worldwide.

Decline: In the 1990s, the PC era began, and the emergence of laptops led to a stronger demand for semiconductor components. Due to the difficulty of R&D and the sharp increase in equipment investment, the horizontal division of labor production method became the mainstream in the PC era, while the vertical division of labor system of Japanese companies became increasingly incompatible, and R&D and production could not be taken care of at the same time. In addition, because Japan's semiconductor products during this period were relatively single, too concentrated on DRAM, and the product added value was low. South Korea, Taiwan and other places mastered the core technology through technology introduction, adopted a horizontal division of labor production method, and quickly replaced Japan as the main supplier through labor cost advantages. By 2000, Japan's DRAM share had fallen to less than 10%, and Japanese companies retreated one after another.

2.2 Japanese semiconductor materials: Leveraging industrial advantages to continue past glory

Although Japan's semiconductor chip share has shrunk, Japan has continued its former glory in the field of semiconductor materials and has always maintained a large market share in the world. Japanese companies have a share of 50% or more in 14 important materials, including silicon wafers, synthetic semiconductor wafers, masks, photoresists, pharmaceuticals, target materials, protective coatings, lead frames, ceramic boards, plastic boards, TAB, COF, welding wires, and packaging materials. Japan's semiconductor materials industry has long maintained an absolute advantage in the world and is the world's largest producer of semiconductor materials.

As the world's largest producer of semiconductor materials, Japan's domestic semiconductor material consumption accounted for 15% of the world's total in 2017, reaching US$7 billion, second only to Taiwan, China, and on par with mainland China and South Korea. Japan is also the world's largest exporter of semiconductor materials. Most semiconductor materials are exported to other countries in the Asia-Pacific region. The semiconductor industry is clearly beginning its third transfer, gradually moving to regions with greater production advantages, mainly in China.

2.3 Competitive Advantages of Japan’s Silicon Wafer Industry

The competitive advantages of Japanese silicon wafer companies are mainly reflected in two aspects. The first is that Japanese companies have a first-mover advantage in the field of silicon wafers. Since the semiconductor silicon wafer industry has four characteristics: high cost, long cycle, patent barriers and technical barriers, new entrants not only need massive funds but also need to introduce cash technology and high-end talents, and the industry barriers are relatively large. The second reason is that Japanese manufacturers have fully utilized the scale effect of the silicon wafer industry. The large-scale production of silicon wafers can reduce fixed costs, increase gross profit margins, and thus increase profitability.

Shin-Etsu Chemical of Japan has been leading the industry in gross profit margin in recent years. GlobalWafers completed its spin-off from SAS Group in 2011 and fully utilized the scale effect through mergers and acquisitions of Japan's Colvalent Silicon Wafer Company and Denmark's Topsil Semiconductor Division, so its gross profit margin is at a relatively high level. Compared with Taiwan Wafer, due to the high barriers to the silicon wafer industry, the company started late, and its main products are silicon wafers below 8 inches, its gross profit margin is relatively low.

2.4 Shin-Etsu Chemical

Shin-Etsu Chemical Co., Ltd., as one of the leading companies in Japan's semiconductor materials industry, is the world's largest supplier of semiconductor silicon wafers, accounting for 27% of the global semiconductor silicon wafer market in 2017.

Currently, Shin-Etsu Chemical's single crystal silicon can reach a purity of 99.999999999% (11 nines), and its technology far exceeds that of other companies. It is the first company to successfully develop 300mm silicon wafers and commercialize SOI silicon wafers.

By analyzing the company's main business revenue, we can find that the company's semiconductor silicon wafer business has entered a recovery and expansion channel. The proportion of Shin-Etsu's semiconductor silicon wafer business revenue has increased year by year since 2013, from 18% in 2013 to 22% in 2017. Shin-Etsu Chemical's semiconductor silicon wafer business revenue reached its peak in 2007, and then fell sharply due to the financial crisis, and was once at a low point. Since 2013, the revenue growth rate has turned from negative to positive, and the business revenue situation has gradually recovered. In 2017, it achieved a revenue of approximately US$2.8 billion, a year-on-year growth rate of about 20%.

2.5 Sumitomo Mitsubishi Corporation (SUMCO)

Sumitomo Mitsubishi (SUMCO) of Japan is mainly engaged in semiconductor silicon material business and is a global leader in silicon wafers. In 2002, Mitsubishi Silicon Materials merged with the silicon manufacturing department of Sumitomo Metals Industries, United Silicon Manufacturing, and changed its name to SUMCO in 2005. Its main products include single crystal silicon ingots, polished silicon wafers, annealed silicon wafers, epitaxial wafers, SOI silicon wafers, etc. It is one of the world's largest 12-inch silicon wafer suppliers, and its SOI silicon wafers can also provide 8-inch products.

In the past few years, SUMCO has been the world's second largest silicon wafer company. In the first quarter of 2018, SUMCO's operating income was US$710 million, a year-on-year growth rate of 39%, achieving substantial growth.

The change trend of SUMCO's operating income is roughly the same as Shin-Etsu's. It also hit the bottom in 2009. Since 2013, the growth rate of revenue has turned from negative to positive and entered the recovery channel. The growth momentum of SUMCO's operating income is much greater than that of Shin-Etsu Chemical, showing a trend of catching up as a latecomer.

3.1 Review of price and investment cycle

Judging from the price changes of silicon wafers per unit area over the past fifteen years, the overall price curve shows a downward demand due to technological advances and cost reductions, but there have been two price increase cycles due to the influence of supply and demand, and it is currently in the third round of price increase cycle.

In the case of insufficient supply of silicon wafers, in addition to raising the price of silicon wafers to obtain more premiums, silicon wafer manufacturers will also increase capital expenditures, such as purchasing equipment, factories and other fixed assets to increase production capacity. Therefore, it can be predicted that silicon wafer manufacturers will start a new round of capital expenditure cycle driven by this round of continuous price increases. Therefore, we have compiled the capital expenditure data of the two major Japanese silicon wafer companies (SUMCO and Shin-Etsu) from 2001 to 2017, as well as the silicon wafer price data, to observe the capital expenditure of silicon wafer companies and the cyclicality of silicon wafer supply and demand.

3.2 A new round of demand cycle begins

With the semiconductor industry booming in recent years, the global foundry industry has ushered in an investment boom. According to SEMI statistics, the global investment in wafer fab equipment increased by 42.5% in 2017, reaching about US$57 billion, and is expected to continue to grow by 10.5% in 2018. SEMI predicts that from 2017 to 2020, 62 new wafer fabs will be put into production worldwide, of which 26 will be built in mainland China, and China will become the region with the highest wafer fab investment in the world. Intensive investment will bring about a rapid increase in global wafer production capacity. According to IC Insights statistics and forecasts, the global wafer production capacity growth rate in 2016 and 2017 was 8.6% and 7.3% respectively. It is expected that by 2020, the global wafer production capacity will continue to grow steadily, reaching 21.3 million pieces/month (equivalent to 8 inches). Among them, the production capacity of 12-inch wafers has the fastest growth, reaching 66.8% of the global total production capacity in 2017.

The continuous growth of wafer production capacity has brought a large demand for the silicon wafer market. According to the latest data from SEMI, the quarterly level of global silicon wafer area shipments reached a record high, with shipments jumping to 3084MSI (million square inches) in the first quarter of 2018, up 3.6% from 2977MSI in the fourth quarter of 2017 and up 7.9% from the first quarter of 2017. According to SUMCO's forecast, the demand for 8-inch silicon wafers in the second quarter of 2018 is about 5.54 million pieces/month, and the demand for 12-inch silicon wafers is about 5.86 million pieces/month, with year-on-year growth rates of 6% and 2.5% respectively, reaching a peak in the past five years.

The semiconductor silicon wafer market has a significant gap between supply and demand, and the global large silicon wafer supply is in serious shortage. According to IC Insights' statistics on global wafer production capacity and silicon wafer production capacity, the global silicon wafer market has been in short supply since 2014, and the gap between supply and demand has increased year by year. Based on the production capacity of wafer fabs and silicon wafer fabs, the global 6-12 inch silicon wafer supply and demand gap totaled 1.33 million pieces/month in 2017. Considering that most 12-inch silicon wafer production lines are still under construction, the global large silicon wafer supply gap will be even more significant.

3.3 The rising channel of silicon wafer prices continues

The widening gap between supply and demand in the silicon wafer market has boosted the continued rise in semiconductor silicon wafer prices. Since 2017, the market for memory chips and logic chips such as CPU/GPU has grown rapidly, and the demand for 12-inch wafers has surged. Due to the relatively slow progress of most 12-inch silicon wafer production lines, there is a serious shortage of 12-inch silicon wafers. In terms of 8-inch wafers, the demand for fingerprint recognition chips and camera chips has increased significantly, and IoT applications are also mostly concentrated on 8-inch wafers. However, the world's major silicon wafer manufacturers currently have no plans to expand 8-inch production lines on a large scale, making the production capacity of 8-inch silicon wafers tight. According to the silicon wafer supply contracts signed by wafer foundries with Japan's Shin-Etsu Chemical and SUMCO in 2017, the contract price of 12-inch silicon wafers has risen from US$75 per piece last year to US$120. In 2018, leading silicon wafer companies will adopt a quarterly quotation method. According to SUMCO's forecast, the price of 12-inch silicon wafers will still increase by more than 20% this year.

According to SEMI data, the price of semiconductor silicon wafers fell sharply in 2008 due to the financial crisis, and reached the lowest point in nearly a decade in 2016. Since 2016, the price of semiconductor silicon wafers has entered the recovery channel, and the upward momentum is strong, gradually rising from US$0.66/square inch in Q1 2016 to US$0.86/square inch in Q1 2018. Since semiconductor silicon wafer companies have reduced production in the previous industry trough, and it generally takes at least two years to reach a new production line, the production capacity of semiconductor silicon wafers cannot be increased rapidly in the short term. Chip companies choose to accept the gradually rising silicon wafer prices to avoid the opportunity cost brought by the lack of raw materials. Therefore, the current semiconductor silicon wafer market is still in a tight balance, and the trend of further price increases for semiconductor silicon wafers will continue.

4.1 Strategic Position of Silicon Wafer Industry

From the perspective of the global semiconductor wafer-related raw material market structure, silicon wafers, as the most important wafer raw material, account for 35%. The product quality of silicon wafers almost determines the subsequent wafer production. At the same time, since the establishment of the silicon wafer industry requires the redesign and manufacture of corresponding equipment, huge capital expenditures and the introduction of high-end technical talents are crucial. Enterprises need to deposit a large amount of funds and talent investment before the return on investment curve rises, so finding the right time to enter the market becomes particularly critical.

With the breakthrough of SMIC and Hua Hong Semiconductor in the foundry industry, the market share of Chinese mainland wafer enterprises reached 7% in 2016. According to data released by SEMI, 62 semiconductor wafer fabs will be put into operation in the world between 2017 and 2020, of which 26 will be located in mainland China, accounting for 42% of the total. These wafer fabs built in China will be fully operational in 2019-20, and by then, the foundry capacity of mainland China is expected to reach 30% of the world's total. This means that the silicon wafer production capacity and wafer production capacity of mainland China are seriously mismatched, and there is room for significant improvement in the self-sufficiency rate.

4.2 Development Progress of Chinese Silicon Wafer Enterprises

At present, the development of the domestic semiconductor silicon wafer market is still significantly behind the world's advanced level. The product lines of mainland silicon wafer companies are mainly below 6 inches. The companies that have achieved mass production of 8-inch production lines include Zhejiang Jinruihong, Beijing YUYAN Semiconductor and Kunshan Zhongchen (a mainland subsidiary of GlobalWafers), with a total production capacity of about 270,000 pieces/month, which is far from meeting the silicon wafer material needs of domestic wafer factories; and the 12-inch production line is still under construction and planning, and does not yet have the ability for large-scale mass production.

The competition landscape of the domestic silicon wafer market can be roughly divided into three echelons: local manufacturers led by Jinruihong and Yuanyan New Materials, joint ventures led by Jiangsu Zhongchen and Shanghai Hi-Tech, and companies that have transformed and entered the semiconductor silicon wafer industry, such as Zhonghuan and BOE.

Zhejiang Jinruihong was established in 2000. It has the most complete industrial chain among domestic enterprises and is able to produce a series of semiconductor silicon wafer products such as single crystal silicon ingots, grinding wafers, polishing wafers, epitaxial wafers, etc. In 2009, the company achieved mass production of 8-inch polishing wafers and epitaxial wafers, becoming the first company in China to master 8-inch silicon wafer technology. At present, the company's products have entered the supply chain of domestic first-tier wafer fabs such as SMIC, Huahong, and Silan Microelectronics. In May 2017, the national major scientific and technological project "8-inch silicon wafer research and industrialization and 12-inch silicon wafer key technology research" led by Jinruihong successfully passed the expert group acceptance, has mastered the 12-inch silicon wafer production process, and officially launched the construction of a 12-inch silicon wafer production capacity of 150,000 pieces/month in September.

Beijing Youyan Semiconductor was established in 2001. It is a wholly-owned subsidiary of the Beijing Research Institute of Nonferrous Metals, a central enterprise. It has been responsible for the scientific research in the field of national semiconductor materials for many years. At present, the company's main products include 5-12 inch silicon wafers, 5-8 inch epitaxial wafers, 3-6 inch zone melting wafers, etc., and its products are exported to many countries and regions such as the United States, Japan, South Korea, and Taiwan. The company has transformed from a single research institution to a large-scale production entity, representing the forefront of domestic silicon wafer technology. At the same time, it has also expanded its production scale in overseas markets and enhanced its international influence. At present, the company has built a 12-inch polished wafer test line with an annual output of 120,000 pieces and a 12-inch epitaxial wafer test line with an annual output of 60,000 pieces.

Shanghai Xinsheng Semiconductor was established in 2014 as a joint venture between Shanghai Silicon Industry Investment Co., Ltd., Shanghai Xinyang, Xinsen Technology and Shanghai Haoxin Investment Management Co., Ltd. The company began to lay out 12-inch silicon wafer production lines at the beginning of its establishment. Currently, the first phase of the project is under construction. The product targets are polished wafers, annealed wafers, epitaxial wafers and SOI silicon wafers suitable for 40-28nm processes. In 2016, the company successfully pulled out a 12-inch single crystal silicon rod about 15 meters long. With the gradual progress of the production line construction, it is expected to achieve a breakthrough in the successful mass production of 12-inch silicon wafers in China.

In addition to the silicon wafer companies that have been engaged in the semiconductor business for many years, the continued prosperity of the semiconductor industry in recent years has also attracted the attention of other industry leaders. Zhonghuan Semiconductor, a leading domestic photovoltaic company, has begun to enter the semiconductor large silicon wafer business. In October 2017, Zhonghuan Semiconductor, Wuxi Government, and Jingsheng Mechanical and Electrical Company jointly established Zhonghuan Leading Semiconductor Materials Co., Ltd., with a total investment of approximately US$3 billion, and will build a semiconductor large silicon wafer production line in Wuxi. Zhonghuan Semiconductor has also carried out the construction of 8-inch production lines with a capacity of 300,000 pieces/month and 12-inch production lines with a capacity of 20,000 pieces/month in Tianjin, aiming to overtake in the semiconductor silicon wafer market. In addition, BOE, a domestic electronics industry giant, announced in December 2017 that it had signed an investment of 10 billion yuan in Xi'an to build a semiconductor silicon wafer base, making a strong entry into the semiconductor materials field.

In recent years, international silicon wafer leading companies have begun to invest and build factories in mainland China. The first joint venture was Zhongchen Silicon Crystal Co., Ltd. established by SAS, the parent company of Taiwan GlobalWafers, in Kunshan, Jiangsu in 1999. It is responsible for the production of 6-8 inch silicon wafers and its operating income in 2016 reached NT$1.93 billion. In addition, Taiwan silicon wafer company Hejing Co., Ltd. has built a new 8-12 inch silicon wafer plant in Zhengzhou, with a planned production capacity of 200,000 wafers per month. The 8-inch production line has been started.

Ferrotec, a Japanese company, established Ningxia Yinhe Semiconductor Materials Co., Ltd. in 2016, planning to invest in the construction of an 8-inch production line with a capacity of 350,000 wafers per month and a 12-inch production line with a capacity of 200,000 wafers per month. The first phase of the project was launched in March 2018. The joint venture has mature technical processes and management experience. Its newly built silicon wafer plants in the mainland are all 8-12-inch large silicon wafer production lines. Its strong capital and technology have exerted tremendous competitive pressure on domestic manufacturers, while also bringing development momentum to the domestic silicon wafer market.

According to the investment and construction of domestic 8-inch and 12-inch wafer fabs, the production progress of wafer fabs is calculated according to the average 3-year construction period, so as to obtain the demand of the domestic silicon wafer market. According to the production line construction progress and plan of domestic silicon wafer fabs, we calculated the supply of 8-inch and 12-inch silicon wafers in the future. The supply of 8-inch silicon wafers in China will continue to grow from 2018 to 2020, but there is still a gap between supply and demand. The supply and demand gap of 12-inch silicon wafers is even larger. Most of the domestic 12-inch silicon wafer production lines are in planning and construction, and the corresponding supply side is almost zero. In the short term, the gap problem needs to be solved through imports. Therefore, stimulated by the imbalance between supply and demand, Chinese silicon wafer companies will usher in new opportunities. The next three years will be the peak period of investment in the domestic silicon wafer industry, which will bring about a significant increase in demand for crystal growth and silicon wafer processing equipment.

Industry dynamic data tracking

According to the data from the Construction Machinery Association, in May 2018, the sales volume of excavators was 19,313 units, a year-on-year increase of 71.35%; the domestic sales volume was 17,780 units, a year-on-year increase of 69.6%; the export sales volume was 1,523 units, a year-on-year increase of 95.3%. From January to May 2018, the operating hours of excavators were 589 hours, a year-on-year decrease of 5.60%.

According to the data from the Construction Machinery Association, the sales volume of truck cranes in April was 3,028 units, a year-on-year increase of 77.80%; the cumulative sales volume from January to May was 13,427 units, a year-on-year increase of 82.68%. The sales volume of forklifts in May 2018 was 59,413 units, a year-on-year increase of 46.29%; the cumulative sales volume from January to May was 256,046 units, a year-on-year increase of 28.30%.

According to the data from the National Bureau of Statistics, the fixed investment in the oil and gas extraction industry in May 2018 was 75.777 billion yuan, a year-on-year increase of 5.10%; according to the disclosure of Baker Hughes, as of May 25, 2018, the number of active oil rigs in North America was reported to be 859, an increase of 15 from the previous week.

The output of metal containers in May 2018 was 10.864 million cubic meters, a year-on-year increase of 27.72%. The output of industrial robots in May 2018 was 13,659 units, a year-on-year increase of 35.82%; the cumulative output from January to May was 60,071 units, a year-on-year increase of 35.42%.

Source: Phoenix News. If copyright is involved, please contact us to delete.

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