Source: Content compiled by Semiconductor Industry Observer (ID: icbank) from Nikkei Asia Comment, thank you.
According to Nikkei , GlobalWafers, the world's third largest chip-making silicon wafer manufacturer, announced on Monday that it plans to build a $5 billion factory in Texas, USA to enhance Washington's ambition to introduce more semiconductor supply chains to its home country.
The Taiwan company in China said that the Texas factory will start production as early as 2025 and will become the largest 300mm wafer material production base in the United States. The plant will enable the company to meet local demand for customers to expand production in the United States, including TSMC, Intel and Samsung . Construction is scheduled to begin later this year.
Although the initial investment of the new plant is about $2 billion, Globalwafers said it does not rule out further expansion there. According to Texas Governor Greg Abbott, the total investment generated by the project could be as high as $5 billion in the next few years.
Silicon wafers are key materials in semiconductor production because they form the substrate for making chips. GlobalWafers lags only behind Japanese Shingotsuki Chemical and Sumco.
“GlobalWafers USA (GWA) will no longer import wafers from Asia, but will produce and supply wafers locally, thereby significantly reducing the carbon footprint,” said Doris Hsu, chairman and CEO of GlobalWafers, which has benefits for customers and companies. Factors are becoming more and more important. "This investment will represent the first new silicon wafer factory in more than two decades and fill a key gap in the semiconductor supply chain," said in a press statement. The announcement comes as Washington held one of the largest investment events of the year, SelectUSA, this week, aiming to attract more investment to support the U.S. chip supply chain. Joe Biden President will deliver a recorded speech at the rally.
decided to build a factory in the United States after failing to acquire German counterpart Siltronic earlier this year. Following the failure of the deal, GlobalWafers said it would spend about NT$100 billion ($3.36 billion) to expand in the United States, Europe and Asia, including building new factories and increasing capacity at existing facilities.
US Secretary of Commerce Gina Raymondo welcomes the decision to build the Texas factory.
“Today’s GlobalWafers statement is crucial to rebuilding domestic semiconductor supply chains, strengthening our economic and national security, and creating U.S. manufacturing jobs,” she said in a statement. "But we are at a time of success or failure to expand domestic semiconductor production. Semiconductor companies need to make investment decisions by the fall to meet the huge growth demand for chips."
Raimondo urged Congress to pass the CHIPS bill as soon as possible, saying it would show the U.S. commitment to providing more companies across the supply chain with the confidence they need to invest in the country. The CHIPS Act will provide $52 billion in incentives related to U.S. semiconductor production
“We take into account government incentives, customer commitment to long-term agreements and diversification of production to determine the location of our new plant,” Doris Hsu said in an interview with reporters.
Hsu said that the delivery time for these chip manufacturing tools continues to be extended due to component restrictions, and her company has ordered all the machinery and equipment needed for the factory to start construction as planned.
Despite slowing end-user demand, including consumer electronics, Hsu said wafer prices have risen in all long-term agreements between the company and its customers. Sumco has told customers that prices will be raised by 30% this year in renewal due to rising raw material prices.
GlobalWafers said the Texas investment is expected to support up to 1,500 jobs, and after multiple stages of equipment installation, the capacity will eventually reach 1.2 million wafers per month, meeting market demand. The company acquired SunEdison Semiconductor in the United States in 2016.
Global Crystal Long-term Contract Sign-in 2031
Xu Xiulan, chairman of Global Crystal, the world's third largest semiconductor silicon wafer factory, said in an interview after the shareholders' meeting a few days ago that general economic issues such as inflation have not affected customers' willingness to continue to sign long-term contracts, and the price of long-term contracts continues to be bullish. At present, some customers have reached 2028, and some customers have signed in 2031. In the next few years, Global Crystal has almost no spot supply.
Recently, foreign capital reports warned that the wave of semiconductor inventory adjustment may cause the silicon wafer market, which was originally the most optimistic in the market, to face pressure simultaneously, and have lowered the evaluation of relevant manufacturers. Xu Xiulan emphasized that its 8-inch and 12-inch silicon wafer production capacity remains full, while yen continues to decline, which is also a big benefit for Global Crystal, which has multiple factories in Japan.
Xu Xiulan, who is also the chairman of China-US Crystal, also said that although the new policies of the Biden administration in the United States affect the company's battery sales to the United States, benefiting from the hot local market demand, China-US Crystal's outlook for the second half of the year is also optimistic. It is optimistic that there will be a chance to challenge 10 billion yuan if the solar energy revenue is calculated alone, which will grow significantly compared with 70 to 80 billion yuan in previous years, setting a record high.
Xu Xiulan believes that so far, Global Crystal's operation has performed well, and everyone is worried that factors such as inflation will affect terminal consumption willingness. However, as far as 12-inch silicon wafer is concerned, no customers mentioned that they have lost production capacity. Even if some downstream applications are weak, the client only adjusts the product portfolio and shows no signs of loose orders. Demand below 6 inches is indeed not as strong as before, but Global Crystal only has one related factory area that is not fully loaded.
In the revenue structure of Global Crystal, silicon wafers below 6 inches account for less than 10%, 8 inches and 12 inches account for more than 90%, and 12 inches are higher than 8 inches. Xu Xiulan mentioned earlier that most of the production capacity has been sold out by 2024. She said yesterday that she will continue to sign new long contracts with customers, mostly focusing on 12-inch silicon wafers, 12-inch insulating silicon overlying (SOI) wafers, and 8-inch FZ silicon wafer production capacity.
Global Crystal has accumulated 33.1 billion yuan in customer advance payments by the end of the first quarter of this year. Xu Xiulan evaluated that the peak period for prepayment collected for signing a long-term contract will fall at the end of this year or the beginning of next year, and will gradually decrease in the second half of next year, and new production capacity will begin to ship.
In terms of silicon wafer prices, Xu Xiulan also mentioned that the quantity left for spot stock by Global Crystal is very small. After the signing of the long-term contract, although there is the right to correct the cost fluctuations, if there is no big change, there will basically be no discussion on changes. The price trend of
long-term contracts is probably the higher the average price in the following years, and the recent long-term contract quotation is higher than that of one or two months ago.
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