Demand for 12-inch silicon wafers has been driven by the memory industry transition to 3D NAND, China-based memory startups' new fab projects, and logic IC foundries' capacity expansions mainly in China, said the sources. Prices for 12-inch wafers have rallied as high as 50% since 2017.

 

       With new 12-inch wafer fabs in China set to become operational, the already tight supply of 12-inch silicon wafers will become more severe in 2018 and 2019, the sources indicated. Chipmakers will be vying for more available 12-inch silicon wafers to ramp their new fabs.

 

       On the supply side, just a few silicon wafer suppliers intend to expand substantially production capacity for 12-inch wafers though the suppliers are aware of their short supply and anticipate the shortage will expand, the sources noted.

 

       Silicon wafer suppliers were engaged in capacity expansions in 2006-2007, but the industry then entered a long period of oversupply. Therefore, the suppliers tend to be cautious about their expansion plans to prevent recurrence of such a setback, Taiwan-based Formosa Sumco Technology has commented.

 

       Prices for 8- and 12-inch silicon wafers will continue their growth in 2018, Formosa Sumco said. Demand for 8-inch wafers is driven by orders for LCD driver ICs, fingerprint sensors, power management ICs and CMOS image sensors, the company indicated.

 

       Formosa Sumco added it has no plans to expand capacity at the moment. The company is capable of producing around 320,000 8-inch wafers and 280,000 12-inch wafers monthly.