Heavyweight! The capacity utilization rate of the wafer foundry will drop to 66, and the manufacturers have a clear intention of de stocking

Source: Network

    Analysts predict that many semiconductor enterprises will clear their inventories this quarter, and they will lose money after clearing their inventories. However, the inventory will not be affected until 2023. The market has some expected judgments on this, so we should be cautious in advance. The downstream has entered the inventory clearing state very early. The car factory will clear the inventory in the first quarter of next year, and the semiconductor can basically clear the inventory in the third quarter at the latest.

    Outside Taiwan, China, the situation in South Korea is not optimistic. Last week, the Korean media Thelec reported that the utilization rate of Korean local wafer factories fell more than expected. It is reported that in addition to Samsung Electronics, which focuses on advanced manufacturing processes, wafer foundry enterprises in South Korea also include DB Hitech, Key Foundry, Magna Chip, and SK Hynix System IC, which moved to Wuxi, China. The factory utilization rate of most of these companies fell sharply in the fourth quarter. The problem is starting next year. In the first half of next year, there is also a pessimistic forecast that the operating rate of some enterprises will stop at 50-60%.

    Some insiders said recently that the utilization rate of DB HiTek‘s wafer factory fell to 80% in the fourth quarter. According to the electronic disclosure system of the HKMA, the average utilization rate of DB HiTek‘s wafers in the third quarter was 95%. The operating rate of Fuchuan plant in Gyeonggi do was 96.9%, and that of Yincheng plant was 92.5%.

    Data shows that the utilization rate of DB HiTek‘s wafer factory has gradually increased from 81.9% in 2017. After soaring to 91% in 2018, 94.5% in 2019 and 97.9% in 2020, it slightly fell back to 96.7% last year. In the first half of this year, the utilization rate of DB HiTek reached 97.7%, but it has been declining since then. In particular, in the fourth quarter, the utilization rate of DB HiTek wafer factory dropped sharply, and seemed to remain at 80%.

    The same is true of other OEM enterprises. It is understood that the operating rate of key foundry, magna chip and SK Hynix System IC‘s wafer plants is maintained at 70-80%. Especially for SK Hynix System IC, which was transferred to Wuxi, China, the utilization rate of the wafer factory is declining significantly. It is also suggested that the operating rate of SK Hynix system IC wafer factory may decline by a greater margin early next year.

    The analysis shows that there are many reasons for the decline of wafer factory utilization rate of domestic and foreign wafer foundry enterprises. First of all, this is because global inflation and tightening policies of various countries lead to reduced IT demand. As the global economy shrinks, the sales of smart phones and household appliances plummet. One of the reasons is that, with the accumulation of the inventory level of the entire industry, the number of wafer OEM orders has dropped significantly.

    Although, some semiconductor products, such as power semiconductors and some micro controller units (MCU), still have high utilization. However, for most other products, the reality is that supply far exceeds demand. For this reason, Korean enterprises operating some 8-inch foundry fabs have frozen prices or reduced some processes, but it is not easy to recover the capacity utilization.

    The real problem is the future. It is reported that TSMC‘s wafer factory utilization rate is expected to drop significantly to 80% in the first half of next year. In particular, some analysts believe that the utilization rate of advanced processes such as 7nm, 6nm, 4nm and 5nm will decline from next year.

    An insider said, "If TSMC‘s utilization rate remains at 80%, the utilization rate of Korean 8-inch manufacturers is likely to drop to 70%." He said.

    In any case, looking back at the development of the industry in the past 20 to 30 years, and analyzing the wafer foundry capacity utilization data of the Black Swan Event in the past, this time should be better than the past three times. It is reported that the three black swan events were: the Asian financial crisis in 1997, when the wafer foundry capacity utilization rate fell to 55%; The Y2K event in 2000 caused the large factory to clear the inventory. At that time, the worst was 44% capacity utilization; In the global subprime mortgage crisis in 2008, the capacity utilization rate fell to 33%.

    Looking forward to the future, demand will return to normal after the inventory is digested, and then go to the boom cycle of inventory building.