Fri, Apr 13, 2018 - Page 12 News List

GlobalWafers sees strong chip demand through 2020

‘SUPER CYCLE’:‘Semiconductor demand is beyond our imagination,’ chairwoman Doris Hsu said, as consumption of 12-inch silicon wafers is expected to grow 14 percent per year

By Lisa Wang  /  Staff reporter

GlobalWafers Co (環球晶圓), the world’s third-largest silicon wafer maker, expects wafer prices to continue to rise through 2020, fueled by strong demand from the memory chip, automotive and power management IC segments, company executives said yesterday.

GlobalWafers, which serves 18 percent of the worldwide silicon wafer market, said the industry is entering a “super cycle” after silicon wafer prices staged a first rebound in the first quarter of 2016, breaking a slump begun in 2009.

Prices have climbed 20 percent from the first quarter of 2016 to average US$0.79 per square inch, GlobalWafers said.

There remains ample room for further price increases as last quarter’s prices were still lower than the US$1 per square inch in 2009, the company said.

“Semiconductor demand is beyond our imagination. Demand will never be a concern, while there is uncertainty on the supply side,” GlobalWafers chairwoman Doris Hsu (徐秀蘭) told investors yesterday.

Consumption of 12-inch silicon wafers is expected to grow 14 percent each year to at least 6.5 million wafers in 2021, from 5.7 million wafers a year, GlobalWafers said.

The three pillars underpinning the company’s growth are silicon wafers used to make memory chips, chips used in electric cars and autonomous vehicles and power management chips used in fast chargers and wireless chargers, Hsu said.

Major manufacturers of silicon wafers are rational about capacity expansion, which has helped minimize the risk of oversupply in the industry, Hsu said.

GlobalWafers expects to produce at full capacity this year and next year as all applications are showing strong demand — something that is rarely seen, she said.

Some nervous customers are seeking to secure new supply contracts even before their existing ones expire, Hsu added.

The company aims to expand capacity by improving production efficiency, which might add 3 to 5 percent to its yearly capacity, she said, adding that the company is not considering building new factories until it has a clearer view of the outlook for long-term orders.

“Our price visibility is very high. This year’s prices will be better than last year’s. The prices will rise even further next year,” Hsu said. “We do not foresee price declines for any single product, or during any of the quarters.”

However, the foreign-exchange rate is the biggest concern for the company, as 80 percent of its revenue is booked in US dollars and the greenback’s weakness against the New Taiwan dollar caused about NT$230 million (US$7.86 million) in unrealized foreign-exchange loss during the fourth quarter of last year, the company said.

Nonetheless, GlobalWafers has been able to keep manufacturing costs lower because 14 of its 16 factories around the world were acquired at discounts, compared with its peers who operate new fabs, Hsu said.

GlobalWafers saw net profit surge to a record-high NT$5.28 billion last year, from NT$939 million in 2016, or an increase in earnings per share from NT$2.54 to NT$12.68. The company’s board has approved a cash dividend of NT$10 per share, representing a payout ratio of 79 percent.

This story has been viewed 4276 times.

Comments will be moderated. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned.

TOP top