GlobalWafers: Silicon wafer market demand is indeed strong, but substantial expansion requires three conditions

 Currently, the global semiconductor supply continues to be tight, and wafer fabs are fully operational to meet market demand, driving shipment area and price growth. The latest report released by SEMI (Semiconductor Industry Association) shows that global silicon wafer shipment area in the first quarter of this year increased by 4% from the fourth quarter of 2020 to 3,337 million square inches (MSI), surpassing the historical record in the third quarter of 2018.

Neil Weaver, chairman of SEMI SMG, said that strong demand for silicon wafers continued to be driven by logic and foundry, and the recovery of the memory market further boosted shipment growth in the first quarter of 2021.

Currently, the market demand for silicon wafers is strong. In response to whether GlobalWafers is considering building a new factory to expand production, Xu Xiulan, chairman of GlobalWafers, said that client demand is indeed strong, but a substantial expansion of production requires support from three conditions, including long-term purchase commitments from customers, advance payments, and increases in silicon wafer prices.

In terms of semiconductor silicon wafer prices, legal persons believe that although GlobalWafers did not talk about prices at the earnings conference, the overall market price trend should be upward and there is no room for decline. Spot prices should increase in the second half of the year.

As for customers' long-term purchase commitments and advance payments, legal persons pointed out that it depends on how strong the demand for products from the world's top silicon wafer manufacturers is, and whether they are willing to pay first to ensure future production capacity.

GlobalWafers has multiple production bases around the world, producing 6-inch, 8-inch, 12-inch and other semiconductor silicon wafer products. Its production capacity is now fully utilized, and even its new factory in South Korea is fully loaded.

It is understood that GlobalWafers announced at the end of last year that it would acquire German silicon wafer manufacturer Siltronic for approximately 3.75 billion euros (equivalent to approximately NT$130 billion), and the final transaction is expected to be completed in the second half of 2021.

In terms of global silicon wafer market share, the top five are Japan's Shin-Etsu Chemical, Japan's Sumco, Taiwan's GlobalWafers, Germany's Siltronic and South Korea's LG. GlobalWafers' acquisition of Siltronic will accelerate the integration of the wafer industry. After the acquisition, the new GlobalWafers will become the world's second largest 12-inch wafer manufacturer, second only to Japan's Shin-Etsu Chemical.