According to SEMI, the global shipments of silicon wafers increased 5.9% quarter-over-quarter to 3,214 million square inches (MSI) in the third quarter, and registered 6.8% growth from the 3,010 million square inches recorded during the same quarter last year, which could be attributed to the strong demand for advanced wafers used for AI.

Citing Lee Chungwei, Chairman of SEMI SMG, SEMI notes that the third quarter wafer shipment results continued the upward trend which started in the second quarter of this year.

It is worth noting that inventory levels have declined throughout the supply chain but generally remain high. Apart from the robust demand of advanced wafers used for AI, the silicon wafer demand for other applications, such as automotive and industrial uses continues to be muted, while the demand for silicon used for handset and other consumer products has seen some areas of improvement, according to SEMI.

In SEMI’s press release, it states that 2025 is likely to continue upward trends, but total silicon wafer shipments are not yet expected to return to the peak levels of 2022.

According to SEMI’s forecast in October, the global shipments of silicon wafers are projected to decline 2% to 12,174 million square inches (MSI) in 2024, while strong rebound of 10% is expected in 2025, with shipments projected to reach 13,328 MSI as demand continues to recover.

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• [News] Global Silicon Wafer Shipments Expected to Rise 10% Next Year, Says SEMI

(Photo credit: Intel)

According to SEMI, the global shipments of silicon wafers are projected to decline 2% to 12,174 million square inches (MSI) in 2024, while strong rebound of 10% is expected in 2025, with shipments projected to reach 13,328 MSI as demand continues to recover.

The report suggests that strong silicon wafer shipment growth is anticipated to continue through 2027.

Increasing demand related to AI and advanced processing is expected to drive improved fab utilization rate for global semiconductor production capacity, according to SEMI.

In addition, the growing demand for silicon wafers is also driven by new applications in advanced packaging and the production of high-bandwidth memory (HBM), as indicated by SEMI.

According to the forecast report from SEMI, global silicon wafer shipments will reach 14,507 MSI in 2026. In 2027, it is expected to reach 15,413 MSI, surpassing the highest record of 14,565 in 2022.

(Photo credit: Intel)

As artificial intelligence (AI) technology enjoys rapid advances, the demand for AI chips is skyrocketing, driving continuous improvements in advanced packaging and HBM (High Bandwidth Memory) technology, which is expected to benefit the silicon wafer industry.

Recently, Doris Hsu, the Chairperson of GlobalWafers, revealed that HBM memory chips required by AI, such as HBM3 and the upcoming HBM4, need to be stacked on dies, with the number of layers increasing from 12 to 16. Additionally, a layer of base wafer is required underneath the structure, which adds to the consumption of silicon wafers.

Previously, it’s reported that there is a severe global shortage of HBM amid the AI boom, and original manufacturers’ HBM production capacity for this year and next already sold out. They are continuously revving up capital investment and expanding HBM production. According to industry insiders, compared to memory technologies of the same capacity and process like DDR5, the size of wafer for HBM chip has increased by 35-45%. Meanwhile, the complexity of HBM manufacturing processes leads to a yield rate that is 20-30% lower than DDR5, while lower yield rate means that fewer qualified chips can be produced from the same wafer area. These two factors imply that more silicon wafers are needed to meet HBM production demands.

Apart from memory, innovations in advanced packaging technology also conduces to silicon wafer. Hsu mentioned that more polished wafers are required for advanced packaging than before in that packaging has become three-dimensional, and the structure and processes have also changed, which means that some packaging may require twice as many wafers as before. With the releasing of  advanced packaging capacity next year, the number of wafers needed will be even more significant.

As an advanced packaging technology, CoWoS (Chip on Wafer on Substrate) is in vogue currently, with demand overbalancing supply.

As per TrendForce’s survey, NVIDIA’s B series, including GB200, B100, and B200, will consume more CoWoS capacity. TSMC is also increasing its annual CoWoS capacity for 2024, with monthly capacity expected to approach 40k by the end of this year, an over 150% increase compared to 2023. The planned total capacity for 2025 could nearly double, and the demand from NVIDIA is expected to account for more than half.

Industry insiders pointed out that with the development of advanced semiconductor processes in the past, die size reduced and brought down the consumption of wafer. Now, driven by AI, the three-dimensionality of packaging leads to an increase in wafer usage, thereby facilitating the development of the silicon wafer industry. However, it is important to note that while silicon wafer is experiencing a boon, the development of HBM and advanced packaging technologies imposes higher requirements on the quality, flatness, and purity. This will also prompt silicon wafer manufacturers to make corresponding adjustments to cope with the AI trend.

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Fab inventories have declined for two consecutive quarters, indicating that reducing excess stock may currently be the semiconductor industry’s top priority. According to industry sources cited in a report from Commercial Times, fabs are predicted to wait until the second half of 2024 to resume ordering silicon wafers.

According to the latest quarterly analysis report from SEMI, a major microelectronics association, global silicon wafer shipments in the first quarter of 2024 reached 2,834 million square inches (MSI), marking a 5.4% decrease from the previous quarter and a 13.2% decrease from the same period last year.

SEMI attributes this decline in silicon wafer shipments to the continuing decline in IC fab utilization and inventory adjustments. Consequently, shipments of silicon wafers of all sizes experienced negative growth in the first quarter of 2024.

Industry sources cited by the same report note that, based on recent trends in foundry orders, apart from TSMC, other semiconductor manufacturers have seen capacity utilization rates around 70%. Among these, DRAM and Flash memory wafer shipments have shown year-on-year increases of 20.3% and 1%, respectively, indicating better performance compared to previous periods.

Japanese silicon wafer manufacturer Sumco recently announced in its financial report that in the first quarter, overall demand for 12-inch silicon wafers had bottomed out. Demand for logic chips used in AI and DRAM had increased. However, for applications outside of AI, customers continued to adjust their production.

Sumco estimates that due to customer production adjustments and the recovery of silicon wafer demand, it may take until the second half of 2024 for the situation to improve.

Industry sources cited by Economic Daily News believe that most IC design companies have returned to normal days of inventory (DOI) and are prioritizing urgent orders for foundries. However, the inventory levels of fabs and memory fabs remain historically high, so they will primarily focus on digesting existing long-term contracts (LTA) in the short term.

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(Photo credit: TSMC)

Escalating demand in sectors like electric vehicles, 5G communications, photovoltaics, and memory storage is currently fueling the rapid growth of the silicon carbide (SiC) industry. Key players in China are intensifying their research and development efforts to overcome technological challenges and secure a substantial market share.

The arrival of 8-inch SiC substrates is crucial and marks a technological significant milestone that everyone desires, opening up new possibilities.

The Turning Point: 8-Inch SiC Substrates

As a third-generation semiconductor material, SiC boasts advantages like a wider bandgap, higher breakdown electric field, and exceptional thermal conductivity. Its stellar performance in high-temperature, high-pressure, and high-frequency applications positions it as a cornerstone in the realm of semiconductor materials.

Fueled by growing demand downstream, the SiC industry is in the midst of a high-speed expansion phase. TrendForce’s analysis forecasts the SiC power device market to reach US$2.28 billion in 2023, with an impressive annual growth rate of 41.4%. By 2026, this market is expected to expand further, reaching US$5.33 billion.

From an industry perspective, SiC devices’ cost structure encompasses substrates, epitaxy, tape out, and packaging processes, with substrates accounting for a substantial 45% of total production costs. To reduce per-device costs, the strategy revolves around enlarging SiC substrates and increasing the number of die per substrate. Notably, 8-inch SiC substrates offer distinct cost advantages over their 6-inch counterparts.

Data from Wolfspeed reveals that the transition from 6-inch to 8-inch substrates results in a modest increase in processing costs but yields an impressive 80-90% increase in the production of qualified chips. The greater thickness of 8-inch substrates helps maintain the shape during processing, reduces edge curvature, and minimizes defect density. Consequently, adopting 8-inch substrates can lead to a substantial 50% reduction in unit production costs.

According to TrendForce’s analysis, the SiC industry currently centers around 6-inch substrates, holding an impressive 80% market share, while 8-inch substrates account for only 1%. The transition to larger 8-inch wafers represents a crucial strategy to further reduce SiC device costs. As 8-inch wafers mature, their pricing is expected to be about 1.5 times that of 6-inch wafers, while producing approximately 1.8 times dies compare with 6-inch SiC wafers, greatly improving wafer utilization.

The industry is steadfastly progressing from 6-inch to 8-inch substrates, offering Chinese manufacturers a unique opportunity to surge ahead. TrendForce’s data suggests that the current market share of 8-inch products stands at less than 2%, with a projected growth to approximately 15% by 2026.

Seizing the Moment: Advancing 8-Inch SiC Substrates

Industry experts highlight the dual challenges of growing 8-inch SiC crystals: (1) the development of 8-inch seed crystals and (2) temperature field uniformity, gas-phase material distribution, transportation efficiency, and increased stress leading to crystal cracking.

As per industry insiders, 2023 is poised to become the “Year of 8-Inch SiC.” Throughout the year, global power semiconductor giants like Wolfspeed and STMicroelectronics have accelerated their efforts to develop 8-inch SiC. In China, significant breakthroughs have been achieved in SiC equipment, substrates, and epitaxy segments, with numerous industry leaders forming alliances with international power semiconductor giants.

TrendForce’s data from the Compound Semiconductor Market reveal that 10 enterprises and institutions in China are currently advancing the development of 8-inch silicon carbide (SiC) substrates. These include Semisic, JSG, SICC, Summit Crystal, Synlight, Institute of Physics Chinese Academy of Sciences, Shandong University, TankeBlue, KY Semiconductor, and IV-Semitec.

Here are the list of Chinese companies in the 8-inch SiC substrate field this year:

KY Semiconductor:

• April 2023: Successfully completed the 8-inch SiC pilot line.
• June 2023: Achieved an average crystal growth yield of over 50% in the 8-inch SiC pilot line with crystal thickness exceeding 15mm.
• September 2023: Successfully launched the 8-inch SiC substrate processing workshop.

IV-Semitec:

• May 2023: Grew 8-inch n-type silicon carbide ingots with a thickness of 27 millimeters.
• September 2023: Signed a strategic cooperation agreement with Spectrum Semiconductor and Gietsic for the joint development of SiC-related products.
• October 2023: Commenced the construction of the pilot line for SiC substrates, with an annual production capacity of 600,000 pieces of 6-8 inch SiC substrates.

Summit Crystal:

• June 2023: Opened the Jinan’s Base with a planned production capacity of 500,000 pieces. It aims to reach full production by 2025, with an expected output value exceeding 5 billion RMB.
• August 2023: Cooperated with Shangdong University, successfully manufactured 8-inch SiC wafers the threading screw dislocation (TSD) density was 0.55 cm^-2, and the basal plane dislocation (BPD) density was 202 cm^-2.

Hoshine Silicon:

• May 2023: Successfully achieved the development and mass production of 8-inch silicon carbide substrates.
• October 2023: 20,000 SiC substrates passed acceptance inspection, demonstrating the capability for mass production.

Synlight:

• September 2021: Launched the single crystal silicon carbide growth project with plans to achieve an annual production capacity of 100,000 pieces upon reaching full production.
• April 2023: Successfully developed 8-inch silicon carbide crystal samples and plans to start small-scale production by the end of the year.

TankeBlue:

• January 2023: Successfully prepared 4H-SiC single crystals with a diameter of 209 mm using the physical vapor transport (PVT) method and produced standard 8-inch SiC single crystal substrates.
• May 2023: Signed a supply agreement with Infineon and started supplying silicon carbide materials.
• August 2023: Began construction of the second-phase expansion project, planning to increase capacity by 160,000 pieces.

JSG:

• June 2023: Successfully developed 8-inch single-wafer silicon carbide epitaxial growth equipment compatible with 6 and 8 inch silicon carbide epitaxial production.
• October 2023: Achieved independent development and commissioning of 8-inch single-wafer silicon carbide epitaxial growth equipment with thickness uniformity within 1.5% and dopant uniformity within 4%.

SanAn Optoelectronics:

• Established a joint venture with STMicroelectronics to build an 8-inch silicon carbide device manufacturing plant, which is expected to start production in the fourth quarter of 2025.
• September 2023: Announced the 8-inch silicon carbide substrate with a production capacity of 12,000 pieces per month, and silicon-based gallium nitride capacity of 2,000 pieces per month.
• October 2023: Started small-scale production and sampling of 8-inch silicon carbide substrates using low-cost technology with low defect density.

SICC:

• May 2023: Signed a new substrate and ingot supply agreement with Infineon, planning to transition to 8-inch silicon carbide wafers.
• June 2023: Successfully prepared low-defect 8-inch silicon carbide crystals with a thickness exceeding 60mm.