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JW Insights: Over 20 12-inch silicon wafer projects are under construction to relieve China’s dependence on imports in a long run
Chinese article by 施旭颖
English Editor 张未名
05-09 18:57

By Miranda Li

Chinese semiconductor manufacturers have signed up to build over 20 large-scale silicon wafer projects since 2017, but some are shelved at a hold-up rate of more than 25%.

Although China’s planned capacity for 12-inch silicon wafers of large-size silicon fabs under construction exceeds 60 million pieces per year, the construction speed is relatively slow to meet the demand in the short term, from the key point in a JW Insights analyst article on the sector’s developments in China.

Silicon wafer is a primary material and accounts for a large proportion of production materials in semiconductor manufacturing. With the improvement of monocrystalline silicon manufacturing technology, the produced size of silicon wafers is gradually increasing.

According to SUMCO’s forecast, the global 12-inch wafers demand will reach 9.1 million per month by 2025. The market is distributed in smartphones, data centers, PC and tablet computers, and automobiles. The smartphone market accounts for the most. The need for 12-inch wafers in data centers and cars is of the most rapid growth.

With the strong support of national policies, the Chinese mainland’s chip manufacturers are expanding their capacity progressively, represented by SMIC and SHHIC (Shanghai Huahong Integrated Circuit) — two major chip companies in Shanghai.

In addition to the capacity expansion, the domestic semiconductor manufacturing technologies are expected to improve, leading to a growing demand for domestic semiconductor wafers and extended market share.

According to IC Insights data, the global silicon foundry market grew by 26% in 2021, hitting a record high after a 21% increase in 2020. In 2022, the global foundry market will grow by 20% to $132.1 billion.

Chinese mainland’s share in the global pure-play foundry market has increased to 8.5%, a 0.9% increase from 7.6% in 2021, a figure close to 10%.

There is an oligopoly situation in the global silicon wafer market that about 90% belongs to international giants such as Japan’s Shin-Etsu Chemical and SUMCO, the Taiwan region’s GlobalWafers, and Germany’s Siltronic.

Chinese mainland’s silicon companies mainly produce semiconductor silicon wafers of six inches and below, which account for about 60% of the country’s silicon material products. Eight-inch silicon wafers account for nearly 20%.

Before 2017, China counted on imports for almost all 12-inch semiconductor wafers. In 2018, Shanghai Xinsheng, a subsidiary of Silicon Industry Group, became the first Chinese mainland company to sell 12-inch silicon wafers on a large scale.

China kicked off large-scale silicon wafer project construction in 2017. Scores of projects have been launched with a planned production capacity of 12-inch semiconductor silicon wafers to reach almost 80 million pieces per year.

Over 50% of such new projects are located in eastern China’s Yangtze River Delta region, including Shanghai, Zhejiang, and Jiangsu. The related companies are Shanghai Advanced Silicon Technology, Zhejiang’s CCMC, JRH QL Electronics, Zhong Jing (Jia Xing) Semiconductor, and Jiangsu’s Xuzhou Xinjing Semiconductor Technology.

These Chinese projects are still under construction or in the stage of customer verification. Their supply may not come soon, as it takes time from production planning to completion.

But JW Insights believes that a rise in market demands and the governmental policy support will favor Chinese companies in ramping up their production capacity. It will effectively relieve China’s dependence on imported large silicon wafers.


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