Demand for 5G and AI Chips Expected to Grow Steadily
While the semiconductor industry is undergoing a slump, wafer manufacturers are aggressively expanding their facilities. This is because most semiconductor companies sign long-term contracts for a stable supply of wafers, and demand for semiconductors used for 5G and artificial intelligence is expected to increase steadily.
SK Siltron announced on Sept. 29 that it will invest 2.3 trillion won to expand its semiconductor wafer plant over the next five years.
The company's board approved an investment budget of 855 billion won for the expansion of 300-mm (12-inch) silicon wafers. In the first half of 2023, the company will study the possibility of making an additional investment of 400 billion won. SK Siltron plans to invest about 2.3 trillion won in the silicon wafer business in three phases over the five years from 2022 to 2026.
Wafer makers are planning to make active investments as the semiconductor cycle is getting shorter and there is ample potential for the growth of the system semiconductor market.
This year, Taiwan’s Global Wafers laid out a plan to build a US$5 billion silicon wafer factory in Sherman, Texas. When completed, the factory will roll out 1.2 million 12-inch wafers on a monthly basis. Ground will be broken before the beginning of November for completion in 2025. Japan's Sumco, the No. 2 player in the wafer industry, announced a plan to build a new factory worth 2.4 trillion won at the end of September last year. The new factory will begin mass production in the second half of 2022.
“Although wafer makers have recently decided to expand their facilities, a supply shortage will be inevitable because it takes two years for their plants to fully operate,” said Kim Young-woo, head of the SK Securities Investment Center.