GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, on Monday said that it is to raise its prices next year as 5G-related applications and the stay-at-home economy have boosted semiconductor demand during the COVID-19 pandemic, leading to supply constraints.
With limited new supply worldwide, demand is expected to rise to the peak hit in 2018, the Hsinchu-based company said.
GlobalWafers expects to produce an additional 170,000 wafers a month next year as its new 12-inch fab in South Korea is increasing production.
Photo: Lisa Wang, Taipei Times
“We expect the new South Korea fab to reach full capacity next year. We fear we will not be able to supply as many [wafers] as customers have requested,” chairwoman Doris Hsu (徐秀蘭) told reporters at a media gathering in Taipei.
All of the company’s production lines are approaching full capacity and will remain so in the first half of next year, she said.
GlobalWafers is to raise the prices of all its wafers, with 12-inch wafers seeing the highest increases, she added.
The price increases would help hold the average selling price steady next year as some long-term contracts expire, Hsu said, adding that the multi-year contracts usually carry a higher average selling price.
The company is also increasing prices to help absorb volatility on the foreign exchange market, she said, as a strong New Taiwan dollar has eroded profits so far this year.
GlobalWafers expects strong demand to bring its annual revenue next year close to 2018’s record high of NT$59.06 billion (US$2.07 billion).
That forecast does not factor in the acquisition of Siltronic AG. The deal is expected to add NT$45 billion per year to revenue upon completion of the transaction in the second half of next year at the earliest.
“This year is quite a good year for us. As we estimated earlier this year, [revenue] has grown each quarter on a quarterly basis,” Hsu said. “Next year will be better than this year.”
Revenue growth should be expected in each quarter next year, she said.
The pandemic has increased demand for networking equipment, remote education, videoconferencing and online gaming, as well as 5G-enabled smartphones, Hsu said, adding that a global move online has accelerated because of the pandemic.
Accelerating uptake of 5G technology for autonomous vehicles and other devices would make “2022 an even better year,” Hsu said.
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