Foundries, Post-processing firms, Equipment Makers to Benefit
The author is an analyst of NH Investment & Securities. He can be reached at hwdoh@nhqv.com. -- Ed.
Despite various measures taken by the industry, the non-memory semiconductor supply shortage continues. In our view, the supply shortage is likely to sustain through 2022. Benefits are expected for foundries, post-fab players, and semiconductor manufacturing equipment makers.
Non-memory semiconductor supply shortage continues
The semiconductor supply shortage remains in play in 3Q21. TSMC’s chairman expects the shortage to sustain into 2022. We predict that 3Q21 foundry prices will climb 15~30% due to supply-demand imbalance. Most foundry players, including TSMC, UMC, and Powerchip, have raised their prices. And, the average delivery cycle has increased from 17 weeks to 19 weeks, which is five weeks longer than usual.
There is also a serious shortage of MOSFETs. From Apr 2021, MOSFET prices started to rise significantly. Many product prices have jumped by two~three times, and for some, prices have been hiked by more than seven times. Manufacturers such as Jiejie Microelectronics, China Resources Micro, and Wingtech have raised their prices, and the delivery cycle has extended from two to five months. Some retailers are pushing to secure inventory in consideration of price expansion, which is further impacting supply-demand imbalance.
Foundries, post-processing firms, and equipment makers to benefit
Unlike memory semiconductors, where supply should exceed demand after 4Q21, supply shortages of non-memory semiconductors such as DDIs, MCUs, PMICs, APs, and image sensors are to sustain. Foundries and post-processing firms such as TSMC, ASE Technology, and DB HiTek should benefit. With materials prices, including for lead frames and molding compounds increasing, post-processing companies are planning to raise their package prices in 2H21.
It is expected that foundry players will continue to ramp up investment after 2022 to address supply shortages. We believe that related equipment makers, such as ASML, JEOL, and Lasertec, will continue to benefit. Of note, ASML’s 2Q21 new orders reached an all-time high of EUR8.3bn (+74% q-q).