Tight supply of 8-inch and 12-inch silicon wafers will persist into 2020 thanks to strong market demand despite the US-China trade conflicts, but customers have shown mixed demand for 6-inch and smaller wafers in recent two months, according to Doris Hsu, chairperson of Taiwan-based GlobalWafers, now the world's third-largest silicon wafer supplier.

Hsu made the remarks at the firm's recent investors' conference. She said that some customers have demanded more shipments of 6-inch or even smaller wafers to replenish their inventories, but some others have temporarily requested a slight cut in shipment volume.

In contrast, demand for 8-inch and 12-inch wafers has been quite strong. GlobalWafers has signed long-term supply contracts with customers, most of which will remain valid through 2020, Hsu said, adding that such contracts for large-size wafers now command 80-90% of her company's existing capacities.

Hsu also disclosed that her company's subsidiary MEMC Korea will kick off volume production of 12-inch wafers in 2020, when the monthly capacity will reach 50,000 pieces in the first quarter and ramp up to 150,000 pieces by the end of the year. The subsidiary has signed five-year supply agreements with clients, with advance payments, shipment volumes and prices all clearly set in the contracts.

The US is imposing a 10% tariff on imports of silicon wafers from China and plans to raise the rate to 25% on January 1, 2019. This, however, has only limited impact on GlobalWafters as the firm's production capacity in China commands only 3% of its total capacities at 16 fabs around the world, according to Hsu.

Hsu said the US-China trade war has more or less affected capacity expansion deployments by silicon wafer suppliers, with some hesitant about raising new expansion plans and some scaling down capacity increase or even scrapping plans on board. Over the long term, Hsu continued, the capacity expansion slowdown may help to achieve a healthier balance between supply and demand.

As tight supply of mainstream large-size wafers will linger, Hsu opined, quotes will rise further for 8-inch and 12-inch wafers in 2019, especially those for 8-inch float zone (FZ) wafer and silicon-on-insulator (SOI) wafer. But quotes for 6-inch wafers will remain flat in 2019.

By: DocMemory
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