Chipmakers are expected to raise prices of 8-inch wafers by up to 20 percent this year on concern over supply constraints as major contract chipmakers Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and Samsung Electronics Co gradually retire less advanced wafer capacity, TrendForce Corp (集邦科技) said yesterday.
It is the first significant across-the-board price hike since a global semiconductor correction in 2023, the Taipei-based market researcher said in a report.
Global 8-inch wafer capacity slid 0.3 percent year-on-year last year, although 8-inch wafer prices still hovered at relatively stable levels throughout the year, TrendForce said.
Photo: Ritchie B. Tongo, EPA
The downward trend is expected to continue this year, with global 8-inch wafer supply expected to drop 2.4 percent this year and 0.5 percent next year, as TSMC and Samsung gradually scale back production of 8-inch wafers, it said.
TSMC started phasing out 8-inch wafer production last year and plans to halt operations at some of its 8-inch wafer fabs next year, while Samsung is more aggressively retiring its 8-inch wafer capacity, the researcher said.
Against that backdrop, contract chipmakers are considering raising 8-inch wafer prices by 5 to 20 percent this year, a larger scale than last year when supply started showing signs of slowing down, TrendForce said.
Chinese contract chipmakers started the first wave of price hikes in the second half of last year, and worries about more price hikes and tight supply promoted PC makers to place orders earlier than before to secure more chips, it said.
Meanwhile, increasing demand for power chips used in artificial intelligence (AI) servers and front-loading demand for chips used in consumer electronics are boosting factory utilization of 8-inch fabs, TrendForce said.
The world’s major contract chipmakers are expected to increase utilization of their 8-inch wafer fabs to between 85 percent and 90 percent on average this year, from 75 percent to 80 percent last year, it forecast.
In view of rising demand for power management chips used in cloud-based AI servers and edge AI devices, PC makers launched a new chip inventory strategy on the belief that strong AI-related chip demand would reduce supply of power management chips used in PCs and notebook computers, in addition to supply of other types of chips, it added.
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