Order visibility at GlobalWafers Inc (環球晶圓) extends into 2024 and its capacity for next year is fully booked, the world’s No. 3 silicon wafer supplier said yesterday.
GlobalWafers is trying to squeeze out extra capacity by increasing production efficiency, but the company is still unable to satisfy customer demand for next year, company chairwoman Doris Hsu (徐秀蘭) told reporters on the sidelines of a ceremony to mark the 41st anniversary of the Hsinchu Science Park (新竹科學園區).
“We have clear order visibility for 2023 and it should be okay into 2024,” Hsu said. “We do not see any signs of things slowing down in 2023 or 2024.”
Photo: Grace Hung, Taipei Times
The firm has received more than NT$100 billion (US$3.6 billion) in orders, Hsu said.
To secure a stable wafer supply, many customers are signing longer supply agreements, from five years in 2007 — when its made-to-order strategy was first introduced — to eight years now, GlobalWafers said.
Although segments have their ups and downs, a weak segment, such as smartphones, is soon offset by the upswing of another segment, such as cars or 5G-related applications, Hsu said.
GlobalWafers said that it expects its factories to remain fully utilized through 2024, mainly because capacity expansion worldwide moves at a snail’s pace.
“The major task of our salespeople is to explain to customers why we can only fulfill 90 percent of their demand,” Hsu said. “GlobalWafers is not the only company in the world that is facing a supply challenge.”
Global shipments of silicon wafers are expected to see annual growth of 6.4 percent next year, 4.6 percent in 2023 and 2.9 percent in 2024, GlobalWafers said.
To expand capacity, GlobalWafers said it would over the next two years invest US$800 million on improving production efficiency at its 12-inch fabs, including those in the US.
Hsu declined to comment on wafer prices, but said that GlobalWafers factors spikes in manufacturing costs into its product pricing.
The cost of transportation and raw materials, including chemicals, have been increasing since the emergence of COVID-19, amid port gridlock, a container shortage and temporary shutdowns at factories.
The company expects the EU’s introduction of a carbon border tax in 2026 to add to its manufacturing costs, as importers and manufacturers outside the EU would have to pay for the carbon emissions linked to the goods and materials they sell in the eurozone, Hsu said.
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