China-based logic IC and memory foundries including Nexchip Semiconductor and Rui-Li (transliterated from Chinese) Integrated Circuit have offered 20% higher prices than what their bigger rivals offer in order to secure more supplies of "dummy" or test wafers particularly 12-inch ones, according to sources at upstream wafer suppliers.

Taiwan Semiconductor Manufacturing Company (TSMC), for example, is offering US$75-80 to purchase test wafers. China-based foundry players have proposed more than US$90 in order to grab more supplies, the sources said.

The higher prices China-based foundries are willing to offer for test wafers have prompted some upstream silicon wafer suppliers to stop quoting their prices for the fourth quarter of 2017 as they are inclined to closely observe market changes, the sources indicated.

Prices of prime silicon wafers, which rose for a third consecutive quarter in the three months to June, are expected to continue trending upward in the third and fourth quarters of 2017 due to tight supplies and growing demand, the sources noted.

Prices for polished wafers for use in the manufacture of DRAM, 3D NAND and other memory products are set to rise another 20% sequentially in the third quarter, while prices for epitaxial (epi) wafers for logic IC manufacturing will increase 15% on quarter. The anticipated less growth in epi-wafer prices is due to the long-term contracts major suppliers including Shin-Etsu and Sumco have stuck recently with their major customers, the sources said.

In other news, Nexchip will be ready for volume production of 12-inch wafers on a contract basis for LCD driver ICs, power management chips and other logic ICs in the second half of 2017, the sources identified. Nexchip will require a huge amount of 12-inch test wafers.

Nexchip is a JV 12-inch foundry between Taiwan-based Powerchip Technology and the Hefei city government of China's Anhui province, running 0.15-micron, 0.11-micron and 90nm manufacturing processes.

Rui-Li Integrated IC, formerly named Hefei Chang Xin, is still constructing its 12-inch fab but has started to source silicon wafer materials recently, according to the source. Rui-li plans to start installing equipment at its facility in the first quarter of 2018, and has been in talks with silicon wafer providers to ensure a sufficient supply of silicon wafers during 2018 when its fab comes online.

Rui-Li is a DRAM manufacturer backed by the Hefei city government of China's Anhui province. Rui-li is looking to operate a 12-inch fab capable of producing 125,000 units monthly with total investment estimated at US$7.2 billion.

By: DocMemory
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