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Tight supply boosting profits for wafer suppliers
Source: DIGITIMES   Editor: Helan   Update Time :2018/3/13 16:52:20

Silicon wafers will continue to experience tight supply in 2018, driven by robust demand from IC foundries. Taiwan-based GlobalWafers and Formosa Sumco Technology (FST) are both among the beneficiaries including Shin Etsu, Sumco, Siltronic and SK Siltron.

The supply of silicon wafers has fallen short of demand since the beginning of 2017, according to industry sources. China-based foundry startups' aggressive expansions, as well as the arrival of new production capacities at Intel, TSMC and other major foundries, led to the tight supply of silicon wafers mainly 12- and 8-inch ones, the sources indicated.

Silicon wafer quotes already rose 15-20% in 2017 as a result of tight supply, said the sources, adding that prices are likely to increase further by at least 20% in 2018 to reflect the ongoing tight supply. The price rally will continue to boost silicon wafer providers' revenues and profitability.

In addition, chipmakers are willing to accept high prices in order to secure enough supplies from their upstream wafer providers, the sources noted. Many of them have struck long-term deals with their wafer suppliers.

GlobalWafers, which acquired SunEdison Semiconductor in late 2016 and has become the world's third-largest silicon wafer company, saw its 2017 revenues climb to a record high of NT$46.21 billion (US$1.58 billion). The Taiwan-based company generated net profits of NT$3.29 billion in the first three quarters of 2017, up 196% from a year earlier, with EPS reaching NT$8.06.

GlobalWafers will report EPS of over NT$12 for 2017, according to market watchers. As the supply of silicon wafers is expected to stay tight through 2021, GlobalWafers, which supplies about 18% of the overall silicon wafers produced worldwide, will enjoy impressive revenue and profit growth over the next three years, the watchers indicated.

GlobalWafers is capable of producing 750,000 12-inch silicon wafers and 1.05 million 8-inch wafers a month. The Taiwan-based company holds an around 14% share of the 12-inch silicon wafer market and a more than 20% share of the 8-inch wafer segment, the watchers said.

FST's EPS is expected to reach between NT$2.80 and NT$3 in 2017, and EPS for 2018 is set to surge significantly, the watchers indicated. The company has reported EPS for the first three quarters of 2017 arrived at NT$1.97.

GlobalWafers's revenues totaled NT$9.03 billion for the first two months of 2018, up 38.9% from a year earlier, while revenues at FST climbed 27.4% on year to NT$2.52 billion.

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