GLOBALFOUNDRIES plans to expand production capacity in all of its U.S. and German facilities

This week, GlobalFoundries, a foundry with little big news, released a piece of compelling news that the company will set up a new factory in Singapore to expand its global production layout. Through cooperation with the Singapore Economic Development Board and the co-investment of relevant customers, GF invested US$4 billion in this Singapore expansion plan. Currently, the plant is under construction and is expected to open in 2023.

In addition, GF also plans to expand production capacity in all of its plants in the United States and Germany, each with an investment of US$1 billion. In this way, in the next two years, GF will spend a total of no less than US$6 billion to expand its production capacity in Singapore, the United States, and Germany.

It is reported that if these fabs are completed, GFs annual production capacity will increase by 450,000 12-inch equivalent wafers, while the total annual production capacity of GFs Singapore plant will rise to 1.5 million (12-inch equivalent wafers). ).

Fab expansion accelerates

In the past few years, due to major changes in development strategies, GF has been in a very conservative state in terms of new plant construction and even sold several fabs. The announcement of the expansion plan is also based on the current global chip production capacity, especially the serious shortage of foundry production capacity. This also highlights the current market demand for wafer fabs from one side. Expansion of production capacity has become the first destination for funds.

According to the latest market research report data from SEMI, global semiconductor manufacturers will start the construction of 19 new high-capacity wafer fabs before the end of this year, and 10 more will be built in 2022. In this way, there will be at least 29 wafers in the past two years. The factory is under construction.

Among them, there are 8 in China and Taiwan each, followed by 6 in the Americas, 3 in Europe/Middle East, and 2 each in Japan and South Korea. These new fabs are dominated by 12-inch wafer fabs, with 15 in 2021 and 7 in 2022. The other 7 fabs are 4-inch, 6-inch, and 8-inch fabs. After completion, these 29 wafer fabs can produce 2.6 million wafers (8-inch equivalent wafers) per month.

In addition, of the 29 wafer fabs, 15 are foundries, with a monthly capacity of 30,000 to 220,000 wafers (8-inch equivalent wafers); 4 are memory fabs, and these new fabs have higher production capacity. 100,000 to 400,000 pieces (8-inch equivalent wafers) can be manufactured per month.

Whether it is a wafer foundry or IDM, starting from the second half of 2020, it has entered a crazy expansion mode, and the 12-inch and 8-inch plants go hand in hand, changing the trend of 12-inch fabs and 8-inch fabs in the early years. The market demand is in an all-around and vigorous state.

Regarding 12-inch wafers, the largest capital expenditure was spent on memory chips (DRAM and 3D NAND). It is expected that the actual and forecast investment from 2020 to 2023 will grow by high single digits every year, and the rate is expected to be further expanded to 10%. In addition, investment in logic chips/MPUs and MCUs will also increase steadily from 2021 to 2023. Of particular interest is power devices. The growth rate of investment in such products is expected to exceed 200% in 2021, while in 2022 and 2022 It will also maintain a double-digit growth rate in 2023.

Starting from the second half of 2020, major manufacturers have accelerated the pace of expansion of 12-inch wafer fabs, and many projects have been launched.

First, the foundry leader TSMC announced that its capital expenditure in 2021 will be increased from the previously estimated 25-28 billion US dollars to 30 billion US dollars, of which more than 80% will be used for advanced process investment, and 7nm, 5nm, 3nm, 2nm, and other processes are produced. The lines use 12-inch wafers.

Not long ago, TSMC also announced a three-year investment of 100 billion U.S. dollars to expand the wafer fab and confirmed that it will invest 2.887 billion U.S. dollars to expand the 28nm process capacity of the Nanjing plant, increasing the monthly output of 40,000 wafers, mainly for the production of automotive chips.

TSMC pointed out that currently there is no cleanroom space for wafer fabs in Taiwan. Only the Nanjing plant has ready-made space and can directly set up production lines, which is conducive to rapid production capacity formation. According to the plan, the 28nm process capacity of TSMC's Nanjing plant will be mass-produced in the second half of 2022, reaching a full capacity target of 40,000 wafers/month by mid-2023. At present, TSMCs Nanjing plant mainly produces 16nm chips, with a monthly production capacity of about 20,000 wafers.

In late March, Power Semiconductor Manufacturing held a groundbreaking ceremony for the Tongluo 12-inch wafer fab. The total investment amounted to NT$278 billion, and the total production capacity was 100,000 wafers per month. It will be put into production in phases from 2023, with a full-load annual output value of more than 600 100 million yuan.

DRAM plant Nanya also announced that it will invest NT$300 billion in the construction of a new 12-inch advanced wafer fab in Taishan Nanlin Science and Technology Park in New Taipei City, Taiwan. Nan Yake Chairman Wu Jiazhao said that the new 12-inch advanced wafer fab will start at the end of this year at the earliest, and the trial production will be completed in 2023. This plant will use the 10nm-level process technology independently developed by Nanya Technology to produce DRAM chips, and plans to build EUV production technology, with a monthly production capacity of approximately 45,000 wafers.

In mid-March, Winbond Electronicsboard of directors resolved to pass the 12-inch wafer fab capital expenditure budget, and the approved capital budget was approximate NT$13.127 billion. The capital expenditure budget is mainly used for the new plant in Kaohsiung, which will be invested successively in March 2021, and will be commissioned in 2022. The Kaohsiung plant is Winbonds second 12-inch wafer fab.

On March 17, SMIC announced that it and the Shenzhen government (through the Shenzhen Reinvestment Group) intend to develop and operate the project through SMIC Shenzhen in the form of proposed funding. According to the plan, SMIC Shenzhen will carry out project development and operation, focusing on the production of 28nm and above integrated circuits and providing technical services, aiming to achieve a final monthly production capacity of approximately 40,000 12-inch wafers. It is expected to start production in 2022. It is reported that the main building of SMICs new 12-inch wafer plant is connected to the 8-inch wafer fab that has already been put into production, and the main part has been completed and is expected to be put into production in 2022.

In August 2020, Chinas first 12-inch automotive-grade power semiconductor automated wafer manufacturing center project was formally signed and settled in Shanghai Lingang New Area. This project is the first step for Wingtech's semiconductor business to achieve the strategic goal of US$10 billion. In early January 2021, Wingtechs wholly-owned subsidiary Anshi Semiconductor announced the expansion of its 12-inch wafer fab in Lingang, Shanghai in response to the surge in demand for semiconductor materials. It will start production in July 2022, and the production capacity is expected to reach 40 per year. Million pieces.

In addition, Intel has determined to build two new 12-inch wafer fabs in the United States.

For Samsung, in addition to new 12-inch factories in South Korea and the United States, its investment in China is very large, mainly in the memory factory in Xi'an. Previously, Samsung decided to invest US$15 billion in its Xian plant, which is the companys only overseas memory production base. After the first phase of investment of USD 7 billion in August 2017, the second phase of investment of USD 8 billion in 2019, a production line built in the first phase of investment has been put into operation in March 2020. In the near future, the second factory will also be put into operation, and the third phase of the project is also under-investment planning. After the completion of the second-phase investment of Samsung's Xi'an plant, the production capacity of NAND flash memory in the second plant will reach 130,000 wafers per month. The production capacity of the first plant is 120,000 pieces per month. The total monthly output of 250,000 wafers is about half of Samsung's 2020 NAND flash memory output.

The above is the expansion and construction of some 12-inch wafer fabs in the past year.

In addition, the 8-inch wafer fab and production capacity are also very interesting, because the market demand has seen an unprecedented high, not inferior to the 12-inch.

In the past, 8-inch wafers were considered backward production lines, and more attention was paid to the construction and mass production of 12-inch wafers production lines. However, it is this product that is "old" for many years than 12-inch wafers. Since 2018, the 8-inch wafer chip production capacity has been obviously insufficient. From the past 2020, the 8-inch wafer production capacity is still very high. Tension, especially in mainland China, in the presence of multiple 12-inch production lines, seems to have overlooked the 8-inch wafer production capacity. Overall, whether it is IDM or foundry, 8-inch wafer production capacity has always been in short supply, and the capacity utilization rate is quite high.

The main reason for this situation is that the demand for analog chips in the market has been increasing. Power management, power devices, CMOS image sensors, MEMS sensors, RF transceivers, PAs, filters, ADCs, DACs, etc., are mostly put into production. In the 8-inch wafer production line.

SEMI's statistical report shows that from 2020 to 2024, global semiconductor manufacturers will continue to increase the output of 8-inch wafer fabs, with an expected increase of 950,000 wafers, an increase of 17%, reaching a new historical record of 6.6 million wafers per month. In the next few years, wafer manufacturers will add 22 8-inch wafer fabs to meet 5G, automotive, and Internet of Things (IoT), which are highly dependent on analog, power management, and display driver ICs, power component MOSFETs, MCUs, and sensors. Demand for growth.

Drive the growth of the semiconductor equipment market

The upsurge of building fabs has directly driven the growth of the semiconductor equipment market. SEMI statistics show that the shipment value of North American semiconductor equipment manufacturers exceeded US$3 billion for the first time in January this year, and then continued to rise month by month. In May, it reached US$3.59 billion, a monthly increase of 4.7% and an increase of 53.1% over the same period last year. Mainland China became the world's largest semiconductor equipment market for the first time last year, followed by Taiwan.

As mentioned earlier, at least 29 fabs will be built in the next two years, and the corresponding equipment expenditures are expected to exceed 140 billion U.S. dollars. It usually takes at least two years to reach the equipment installation stage after a new plant starts. Therefore, most chip manufacturers starting to build a new plant this year will not be able to start the installation until 2023 at the earliest. However, some manufacturers may start the installation in advance in the first half of 2022. operation.

It is expected that by 2022, semiconductor equipment investment will remain at the level of more than 3 billion US dollars, and foundry will account for more than half of the total expenditure. The following are discrete/power devices accounting for 21%, analog ICs accounting for 15%, MEMS and Sensors account for 7%.

According to preliminary statistics released by the Semiconductor Manufacturing Equipment Association of Japan (SEAJ) on June 17, Japan's semiconductor equipment sales (3-month moving average) surged by 48.6% year-on-year in May 2021, reaching 305.405 billion yen. , Showing a growth trend for the fifth consecutive month, the largest increase in 46 months (a 49.9% surge since July 2017), and monthly sales exceeded the 300 billion yen mark for the first time in the history of the year. New historical record since.

Among Japanese semiconductor equipment manufacturers, 59% stated that they had experienced an insufficient supply of parts due to insufficient production of existing parts suppliers in the past year. In addition, more than 70% of manufacturers said that they had faced issues such as procurement delivery time, price, and quality. Among the companies facing the problem of insufficient parts supply, there has been a trend to find new parts suppliers, including those who have not produced parts for semiconductor equipment before.

In the semiconductor equipment consumer market, Taiwan is an important town, among which TSMC and UMC are the most demanding.

Since about 80% of TSMCs capital expenditure this year is used for advanced manufacturing processes, the necessary EUV equipment supply chain below 7nm will benefit, including EUV lithography machine manufacturer ASML, EUV mask box supplier registration, EUV equipment module foundry Fanxuan and Gongzhun, Jingding, Ruiyun, and vacuum service solution providers in the supply chain can also enjoy business opportunities. In addition, about 10% of TSMCs capital expenditures in 2021 will be used for advanced packaging and testing and photomasks, which translates to about US$3 billion. It is understood that TSMCs new plant in Zhunan is expected to be mass-produced from the end of this year to the first half of next year. It is expected that the automation equipment manufacturer Wanrun, the semiconductor wet process equipment manufacturer Hongsu, and Xinyun will share large orders.

In March of this year, the media reported that Samsung urgently sought UMC to negotiate the production capacity of UMC's Nanke plant. After two months of talks, the two parties finally made a decision. With Samsung as the leader, the company will contract about half of the production capacity of the Nanke plant. In addition, UMC has also negotiated contracts with other customers, including MediaTek, Novatek, Realtek, etc., to secure a contract for the production capacity of 27,500 pieces of Nanke plant in the next 6 years with a prepaid deposit, and UMC will Use this money to purchase additional equipment needed for Nanke's P6 plant to expand the 28nm process.

Semiconductor materials are in short supply

The popularity of fabs has not only driven the substantial growth of the semiconductor equipment market but also has a great impact on the semiconductor material market, especially silicon wafers (silicon wafers), which have attracted the most attention.

In the semiconductor supply chain, silicon wafer production is directly connected to wafer manufacturing. In the first half of this year, Japanese silicon chip manufacturer SUMCO Chairman and CEO Hashimoto Masato said that since he has been in the semiconductor industry for more than 20 years, the shortage of chips for such a long time is unprecedented. With 8-inch silicon wafers as the mainstay, orders that exceed the company's capacity have poured in. Both the company and its customers are out of stock.

Specifically, there is a shortage of 12-inch silicon wafers for logic, and 8-inch products, which are mostly used in automobiles, are even shorter.

Hashimoto pointed out that the current distressing thing is that there are no factories available to increase the production of silicon wafers. The demand from 5G and data centers will increase in the future. Therefore, it is evaluated to build the factory from the ground up.

Hashimoto's above remarks also indicate that SUMCO is considering building a new silicon wafer factory. SUMCO's investment in increasing production since 2008 has only been to increase the capacity of the existing factory and has not built a new factory.

Regarding the silicon wafer market forecast, Hashimoto Masato pointed out that the current production of existing equipment is fully loaded. The semiconductor market is growing at an annual rate of about 6% even in a downturn, and silicon wafers are also increasing production at an annual rate of 5-6% in line with the growth of semiconductors. The equipment for increasing production is close to the limit, and the supply and demand of silicon wafers may continue to be tight.

SUMCO pointed out in the financial report data released on February 9 that regarding the future silicon wafer market outlook, driven by 5G/smartphone/data center demand, the shortage of 12-inch silicon wafers for logic chips may continue. In the area of ​​8-inch silicon wafers, automotive/civilian demand has rapidly recovered, and demand has reached a peak level comparable to 2018. It is estimated that the supply shortage may continue until around 2022.

Silicon wafer companies in mainland China are also expanding production.

Especially in the field of 12-inch silicon wafers, Chinas local market share is low and most of them rely on imports. Most domestic manufacturers have a mass production capacity of 8-inch silicon wafers, but they are compared with major international silicon wafer manufacturers in terms of technology accumulation and market share. , There is a big gap. Faced with the surge in demand for the 12-inch silicon wafer market, most local silicon wafer companies in China are stepping up their deployment and formulating expansion plans. Representative companies include Shanghai Silicon Industry, Shengong, Leon Micro, Shanghai Xinsheng, Zhongxin Wafer, and Zhonghuan. For example, Zhongxin Wafer has officially put its 12-inch silicon wafer expansion plan on the agenda and will continue to expand its production capacity of 70,000 wafers on the basis of the existing 30,000 wafers per month, with a view to reaching a monthly production capacity of 100,000 wafers by the end of the year. scale. However, 100,000 wafers are only a phased goal of Zhongxin. In 2022, Zhongxin will continue to actively seek capacity expansion, eventually forming a monthly production capacity of 200,000 or even 300,000 12-inch silicon wafers.

Drive investment

Newly-built fabs, procurement of semiconductor equipment and materials, and procurement of parts and components by semiconductor equipment manufacturers all require a large amount of investment.

According to IC Insights statistics, the total capital expenditure of the semiconductor industry in 2020 is US$113 billion, and it is expected to increase by 16% to 23% year-on-year in 2021.

Three companies, Samsung, TSMC, and Intel, account for more than 50% of semiconductor capital expenditures in 2020. Among them, Samsung is the company that spends the most in 2020, reaching 27.9 billion U.S. dollars, and expenditures are expected to be flat in 2021.

TSMC has the largest increase, from an increase of US$12.8 billion in 2020 to US$30 billion in 2021, an increase of 74%. TSMC will account for more than 60% of the $20.4 billion increase in total industry spending.

Intel has stated that it will increase capital expenditures from USD 14.3 billion in 2020 to USD 19.5 billion in 2021, an increase of 37%.

In addition to enterprises, governments are also investing heavily in the current environment of the semiconductor industry.

For example, the U.S. Senate approved a bill this month that includes $52 billion to fund semiconductor research, design, and manufacturing;

The Ministry of Economy, Trade, and Industry of Japan announced a "national project" earlier this month to support semiconductor manufacturing in Japan;

South Korea announced a plan in May to invest US$450 billion in non-memory chip manufacturing in the next ten years; in May, the European Union also announced that it was preparing to invest a large amount of money to expand the semiconductor manufacturing business in Europe.