The outbreak of component shortages

2018-04-11

The once-a-decade trend of out-of-stock booms has been quiet in 2016, and continued fermentation reached its peak in 2017. The fundamental reason for the outbreak of stock-out is the cyclical adjustment of the semiconductor industry, and the imbalance between upstream and downstream supply and demand has been continuously amplified. It will take time to expand production capacity, and the market gap will not be able to be filled in the short term. The shortage of goods in 2018 will continue.


Looking back at the shortage of goods in 2017, the following reasons are summarized: First, from the perspective of supply, the semiconductor industry is overly cautious about the demand side, and the production capacity is insufficient. The most prominent is the production capacity of upstream silicon wafers. Supply exceeds supply, which directly led to the tight supply of TSMC, Samsung and other wafer foundries and many IDM vendors.


Currently, the silicon wafer industry is also the monopoly of oligarchs. Japan's Shin-Etsu, Sumco, Taiwan Universal's wafers, Germany's Siltronic, and South Korea's LG Siltron have almost 95% of the world's market share. Over the past decade, the global economic growth has slowed down, and market demand has been sluggish. As a result, these silicon wafer giants have been too pessimistic about the market demand and adopted a production-conservative strategy, which has stimulated the wave of shortage of goods from the source.


In 2017, the biggest shortage of silicon wafers is 8-inch capacity. Some semiconductor companies pointed out that because power management chips, fingerprint identification chips, LED driver chips, and MOSFETs are all 8-inch production lines, the shortage of 8-inch silicon wafers is justified. There are also authoritative agencies predicting that the new output of 8-inch silicon wafers will have to wait until 2018-2019. It is foreseeable that 8-inch silicon wafers will still be in tight supply in the first half of 2018. The shortage of 12-inch silicon wafers mainly stems from the demand for 10-nanometer high-end process migration, 3D NAND memory technology generation replacement, and large-scale expansion of the 12-inch Foundry plant in the mainland.


Currently, the large-scale expansion of a 12-inch wafer foundry at the mainland semiconductor plant will also join the wave of silicon wafers. Although the silicon wafer industry is also a part of the Mainland's policy of nurturing semiconductors, Stanley Zhang, founder of SMIC, has established Shanghai Xinsheng Semiconductor as the first 12-inch silicon wafer supplier in mainland China. However, the current yield rate is still low, and it is difficult to influence Silicon wafer market supply and demand.


Second, from the demand side, although the growth rate of the global smart phone, tablet PC and PC industry has gradually slowed down, the demand for semiconductors in several emerging application areas such as the Internet of Things, new energy vehicles, industrial automation, and medical care has grown rapidly. It has become a new driving force for the recovery of the semiconductor industry.


At the same time, even if the slow-growing mobile phone industry, from the functional machine to the intelligent machine transition, the demand for conversion from 3G to 4G also prompted the demand for corresponding components and components. Taking MLCC as an example, 4G mobile phones have twice the demand than 3G mobile phones, and smart phones have several times more demand than functional devices. The demand for a new iPhoneX for MLCC is as high as more than 1,000. Similarly, the demand for MOSFETs in applications such as new energy vehicles and wireless charging is also leaps and bounds. The demand for capacity enhancement of DRAMs and NAND Flash by smart phones, servers and PCs has been rising all the way. Therefore, the recovery of the demand side and the rise of emerging markets are the direct reasons for this shortage.


On the whole, in addition to the serious imbalance between supply and demand, the distributors acted as an important driver of price rises. Of course, from the perspective of the entire semiconductor chain, the most profitable ones are still the original manufacturers. They have the greatest right to speak louder and louder in the market. Some distributors have also seized the opportunity to seize stocks and they have benefited a lot from them. "and" hard-working" SMEs and end-users to pay for it.


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