Silicon wafer manufacturers have seen their clients become more reluctant to sign long-term agreements (LTA) particularly those for 8-inch and smaller size products, according to industry sources.

With many of their LTA contracts set to expire in 2020, silicon wafer makers are negotiating with the clients about renewing the contracts. However, many of their LTA customers intend to reduce the sizes of their promised volumes or skip the supply of 8-inch and smaller size wafers, the sources indicated.

Silicon wafer producers find it more difficult to strike LTA contracts for the supply of 8- and 6-inch, and smaller size wafers given the still sufficient supplies from the spot market, the sources noted. Nevertheless, transaction volumes are currently low in the spot market, the sources continued.

Meanwhile, spot prices for silicon wafers are under downward pressure if transaction volumes remain slow, the sources said. Formosa Sumco Technology (FST), which relies more on the spot market, saw its cumulative 2019 revenues through October decline 27.8% from a year earlier to nearly NT$9.8 billion (US$321.9 million).

GlobalWafers, which fulfills the majority of its orders based on LTA contracts, expressed previously caution about its sales outlook for the rest of this year as some major clients are cautious about placing new orders.

By: DocMemory
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