On September 29, according to MoneyDJ reports, a source in the semiconductor industry revealed that 8-inch foundry has taken the lead in increasing prices recently, including UMC’s 0.18-micron process and the world’s advanced 0.15-micron process have all increased their quotations, with an average increase of 10% Within.
And recently, SMIC was also reported to have been included in the "blacklist" by the United States. A document suspected of being issued by the Bureau of Industry and Security of the US Department of Commerce was circulating on the Internet. The document shows that certain products exported to SMIC and its subsidiaries and joint ventures will be subject to export controls. Once the sanctions are implemented, SMIC may face a situation where the supply of equipment is cut off.
the highest 50% price increase for foundries?
Although the content of the above-mentioned documents is full of doubts, SMIC also emphasized that it has not received such official news, but without a clear result, the possibility of SMIC being sanctioned in the future cannot be ruled out.
spreading these news will inevitably cause panic among SMIC customers. In order to avoid future risks, SMIC’s two major US customers, Qualcomm and Broadcom, have also recently reported actively contacting Taiwanese foundries such as TSMC and UMC to understand the capacity allocation in the fourth quarter of this year and next year.
It is understood that the current largest customer of SMIC is Huawei HiSilicon, followed by Qualcomm and Broadcom. Foundry orders are mainly PMIC (power management chips) with 0.18 micron process. Broadcom and Qualcomm account for about 20% of SMIC's revenue, while 0.15 and 0.18 micron processes account for one-third of SMIC's total production capacity. .
Therefore, once SMIC is determined to be sanctioned, on the one hand, it will cause a big blow to SMIC’s revenue, and on the other hand, it will force foreign customers to transfer orders. SMIC’s future business development in the international market will also be greatly affected. Big restriction.
This year's global epidemic has brought new market demands to the PC, TV industry and some consumer electronics products, which also makes the market demand for panel driver ICs, PMICs, etc. continue to rise. At present, whether it is panel driver IC, NOR Flash or PMIC, most of them use 8-inch wafers. In the second half of this year, the factory also frequently reported insufficient 8-inch production capacity. Z2z
World Advanced Chairman Fang Lue recently stated that the 8-inch foundry production capacity in the second half of 2020 has been in short supply, and orders are scheduled to 2021, and the tight production capacity will continue until next year. UMC also stated that the 8-inch production capacity is fully loaded, the 12-inch production capacity has reached more than 90%, and the average capacity utilization rate is more than 95%.
It is inevitable that industry insiders will reveal that starting from the first quarter of 2021, foundry prices will increase by more than 15%. However, SMIC may become the biggest variable among them. According to public information, the current monthly capacity of SMIC’s 8-inch wafers is about 480,000 pieces, with a global market share of about 5%. It is the fifth largest wafer foundry in the world, second only to UMC.
If SMIC is sanctioned, the orders of Qualcomm and Broadcom will inevitably need to find new foundries. The market capacity gap will further increase, and foundry prices may also increase accordingly. The industry even reported that foundry executives said that if SMIC is banned, it will raise prices by 30% for existing customers and 50% for new customers.
With the full capacity of first-tier manufacturers such as TSMC, as the world’s fifth largest foundry, if SMIC is sanctioned, the rise in foundry prices may bring new opportunities to second- and third-tier fabs. The round foundry pattern will also change.
The dust is undecided, SMIC or Huawei's old path?
is approaching the November presidential election in the United States with only more than a month left, and there are still many variables during this period. Since the beginning of this year, even in the face of turbulent international trade, SMIC’s capital expenditures have been increased significantly. The second quarter financial report shows that SMIC’s planned capital expenditures have increased from US$4.3 billion in the first quarter to US$6.7 billion. Expansion of equipment and production capacity. The editor of
believes that referring to the implementation model of Huawei's ban, SMIC is likely to have a buffer period of 6 to 8 months. This period may provide SMIC with an opportunity to stock up equipment. Since the beginning of this year, various signs have shown that SMIC is intensively purchasing equipment to prepare for capacity expansion. If the ban is implemented, the procurement efforts will also be further increased.
currently includesAmerican semiconductor equipment suppliers such as Kelei, Fanlin and Applied Materials account for 45% of the global market share. Previously, due to the Huawei incident, many domestic foundries began to purchase Japanese semiconductor equipment, and Tokyo Electronics' sales in China from April to June this year even increased by 46%.
But regardless of whether SMIC is sanctioned or not, as many foreign industry figures have said, it is certain that sanctions will only accelerate China's self-research rate of semiconductor technology. As the leader of the foundry in mainland China, SMIC has no doubt about the significance of China's semiconductor industry, but it is unable to OEM for Huawei. There are also many accusations and abuses who believe that SMIC is too weak under foreign sanctions. In fact, as far as foundries are concerned, no one is not dependent on the global supply chain. What we need to recognize is that the situation faced by SMIC is equally difficult, and temporary compromise is not weakness. As the saying goes, "I'm not afraid of leaving the green hills without firewood." Only by living can you be qualified to talk about the future.
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