With the vigorous promotion of 5G, the penetration rate of 5G smartphones has increased, which has greatly increased the demand for many of these components.
Since 2020, due to the impact of the new crown pneumonia epidemic, the housing economy has risen, including the purchase of laptops and tablets. This has made the 8-inch wafer fab as the main production of power components, power management ICs, and image sensors. The supply of products such as detectors, fingerprint recognition chips and Display driver ICs is even tighter, and all these problems are attributed to insufficient 8-inch wafer production capacity. Moreover, this situation will continue beyond 2021, and there is no chance of alleviation in the short term.
As for the reason why 8-inch wafer production capacity cannot keep up with the growth of market demand and the imbalance between supply and demand, some research and investigation agencies believe that the key factor lies in the lack of investment in 8-inch wafer fabs.
In fact, over the past few decades, foundries have been increasing the size of standard wafers from 4 inches to 6 inches, to 8 inches, and even to the latest 12 inches. For a long time, people have believed that 12-inch wafers are better than 8-inch wafers, because larger wafer sizes can reduce waste and increase the daily output of wafer foundries.
Because of the above recognition, there are not many foundries dedicated to the development of 6-inch or smaller wafer production capacity at this stage.
However, many foundries are still operating 8-inch wafer production lines, including TSMC, Samsung, and many second-tier foundries, which currently provide foundry services at this node, such as GF, SMIC International, UMC, Tower semiconductor, and the world’s advanced manufacturers. At present, many components or chips used in the Internet of Things (IoT) and 5G, as well as some analog chips, MEMS chips, and RF solutions, continue to be produced on 8-inch wafers.
Therefore, although 8-inch fabs are not as good as 12-inch fabs to produce cutting-edge CPUs, GPUs, FPGAs and other products with advanced manufacturing processes, it is an indispensable key.
However, according to past experience, 8-inch wafers should have been gradually reduced with the increase in the use of 12-inch wafers. This is expected to be true during the period from 2007 to 2014, but there has been a change since then. The reason is that the 8-inch wafer production line is very mature and the cost is low, which makes many customers who originally 8-inch wafers migrated to larger wafers for production, but found that they did not get much benefit. In particular, when customers want to use mature and low-cost technology for production, they will find that 8-inch wafers are more practical than 12-inch wafers. This is the main reason why many IoT sensors and other products use relatively mature nodes.
Before the new crown pneumonia epidemic, the capacity utilization rate of 8-inch wafer fabs in many foundries was already very high.
For example, the foundry leader TSMC has been slow in adding 8-inch wafer capacity in the past, which has kept 8-inch wafer capacity in a tight state. However, this does not mean that the utilization rate of every foundry with an 8-inch wafer production line is very high. Because in some cases, when a company transfers the design and production of a new product to a new fab, it may require a lot of time and money.
In other words, if a company’s products produced in foundry A are to be transferred to foundry B for production, the cost and time of redesign must be spent in the process, and the cost of redesigning the mask is the highest. As a result, the cost of related products will be greatly increased, resulting in the same 8-inch wafer foundry, but the capacity utilization rate will be different.
However, the capacity utilization gap of 8-inch wafer fabs has changed after the new crown pneumonia epidemic. Due to the fermentation of the housing economy, the sales of personal computers and consumer Electronic products have exploded, which has resulted in a breakthrough demand for various chips, which has made the capacity of each 8-inch wafer fab continue to be fully loaded to produce new products. Products, which puts pressure on the supply chain.
Manufacturers pointed out that products including power supplies, CMOS image sensors, and RF radio frequency are currently in tight supply. In addition, as the future demand for 5G terminal equipment and automotive electronics is expected to increase, the demand for Wi-Fi and Bluetooth chips will also face lack of pressure in the future.
In addition, Huawei was previously sanctioned by the US embargo. The large number of market purchases before the ban took effect has also caused the market to face an imbalance between supply and demand. Even now, Huawei’s competitors, such as Xiaomi, are still stepping up their purchase of semiconductor products, hoping to make their products fill up the gaps Huawei left in the market after the ban takes effect. This makes relevant foundries also Trying to solve the problem of lack of capacity.
According to statistics, it is predicted that by 2021, 220,000 new 8-inch wafers will be put into production every month in the world, so that the total global 8-inch wafer production capacity will exceed 6.4 million pieces per month by then. However, such capacity does not seem to be able to completely relieve the current capacity pressure on the market.
TSMC Chairman Liu Deyin once said that the semiconductor boom in 2021 is still very optimistic, making TSMC’s production capacity really tight. However, TSMC will still try to help customers grow better in the future.
MediaTek Chairman Cai Mingjie also said that according to supplier sources, the tight production capacity in the first half of 2021 is currently estimated to be difficult to relieve. The main reason for the tight production capacity is that the industry has not invested enough in mature processes in the past few years, and the amount of investment in advanced processes has been huge.
Power Semiconductor’s chairman Huang Chongren has a more conservative view on the status of capacity resolution, pointing out that the shortage of global foundry capacity will continue until after 2022. The reasons include demand growth rate greater than capacity growth rate, and include 5G and artificial intelligence ( AI) and other applications will drive more demand.
According to the opinions of the above-mentioned industry executives, although various fabs have begun to make preparations, they are still not optimistic about solving the shortage of 8-inch wafer production capacity in 2021.