Author | Home scale from the planet Magnesia
Just this week, memory giant Kiyoha confirmed an $840 million investment in expanding its semiconductor business, including building a new fab at its production site in Ishikawa Prefecture, Japan, and introducing a new production line in the old one.
In an exclusive interview, Stacy J. Smith, chairman of The Armored Man, said: "The goal of the new factory is to confront Samsung Electronics (in this market) and protect market share. ”
Back to Samsung Electronics, the semiconductor giant will build three chip factories in one go this year, including the P3 factory that has been built, the P4 factory that will be built soon, and the wafer foundry in Austin, Texas, USA. At the same time, Samsung Electronics also plans to add new production equipment for the existing P2 factory to fully utilize the production capacity.
If the production capacity competition between Samsung and Jiaoxia is only the "tip of the iceberg" of the memory industry, then looking at the entire semiconductor industry, the giants' expansion plans are even crazier.
Missing cores, or missing cores
Until 2022, the lack of cores is still not improving.
Among them, consumer electronics such as mobile phones, game consoles, and computers are often out of stock due to chip problems, while the signs of delivery delays and functional reductions caused by the lack of cores in the automotive industry are still very obvious.
From the perspective of the most affected automotive industry, the lack of cores mainly occurs at two levels: first, the development of intelligence has made the proportion of semiconductors in automobiles higher and higher; on the other hand, the delivery cycle of chip manufacturers is getting longer and longer, and the mature process chips required for automotive chips are still unable to place orders.
Other industries are very similar to the automotive industry.
Since it is a matter of supply and demand, the most direct way for the semiconductor industry to change the lack of cores is to increase production capacity, ensure supply and shorten delivery time.
There are research institutions that count the major projects of chip manufacturers in 2021. According to incomplete statistics, 24 companies added or expanded 40 projects in the whole year last year. Gartner estimates that the capital expenditure of these chip manufacturing industries has reached $146 billion, of which the investment of foundry giants such as TSMC, UMC, and SMIC is in the tens of billions of yuan.
Image source | Core thoughts
From the perspective of production line type, most wafer foundries and IDM manufacturers will focus on the mature process represented by 28nm and 40nm. TSMC and Samsung have spent huge sums of money to build new advanced process factories to prepare for the 3nm era.
On the one hand, these mature production lines can improve the current lack of cores, and on the other hand, they are also the most effective way for chip manufacturers to expand production.
In addition to chip manufacturers frantically expanding production lines, upstream silicon wafer manufacturers are also building factories under strong demand. On the 15th of this month, the well-known silicon wafer manufacturer Global Wafer announced last year's financial report, under strong demand, last year's Global wafer consolidated revenue reached 61.13 billion yuan, an annual increase of 10.4%, a record. At the meeting, Global Wafer also released an important news: it will build a new 12-inch fab in Italy and plan to expand production in the second half of next year.
There is more than one global wafer manufacturer that chooses to expand. Germany's Siltron, South Korea's semiconductor wafer manufacturer SK Siltron, Chinese mainland wafer leader Shanghai silicon industry and other first-tier manufacturers have announced plans to build a new 12-inch semiconductor wafer factory.
This wave of "expansion" is no less than that of chip manufacturers.
Anti-globalization trend
Supply and demand are not the only factor in expanding production, and supply chain security under the epidemic has quietly changed the industry. Although semiconductors are an industry that is extremely dependent on the global industrial chain, with the deepening impact of the epidemic, politics and other factors, countries have begun to think about how to "localize" the semiconductor industry and ensure the security of the supply chain.
Intel is the beneficiary of this wave of competition.
When Pat Kissinger succeeded him as CEO of Intel, Intel resolutely opened the IDM 2.0 plan, directly calling mainstream foundries such as TSMC and Samsung.
Since then, Intel has successively rumored the acquisition of RISC-V architecture chip solution provider SiFive, the acquisition of wafer foundry company High Tower Semiconductor, and a number of chip companies. In March this year, Intel launched a "European investment plan" worth 80 billion euros to build a complete supply chain from research and development, manufacturing to packaging in six European countries.
Behind this series of layouts, the most fundamental reason is to reduce the dependence on wafer foundries in Asia, so that Intel occupies a place in chip manufacturing.
In an interview on Wednesday, Kissinger likened semiconductors to oil: "Over the past 50 years, oil reserves have determined geopolitics, and for the digital future, the location of fab production is even more important." ”
According to data from the International Semiconductor Industry Association, as of 2020, Asia has accounted for 79% of global chip production capacity, while Europe and the United States add up to only 21%, of which advanced process production capacity is monopolized by TSMC and Samsung.
At the beginning of the epidemic in 2020, in order to ensure the chip demand of large customers, many wafer foundries in Taiwan Province transferred the order capacity that originally belonged to automotive chips to higher-margin consumer electronics chips, which became one of the factors of unprecedented "big core shortage" in the automotive industry in the second half of the year.
Of course, in this "lack of core" crisis, not only the automotive industry is a "victim", and some other manufacturers with weaker voices are also distressed.
If chip manufacturing remains in Asia for a long time, it is undoubtedly a disadvantage for European and American manufacturers. The latest news said that TSMC's large customer Nvidia plans to change some chips to Intel in the future.
In addition to the beginning of the transfer of enterprises to Europe and the United States, starting in 2020, European and American governments have also begun to intentionally promote industrial transfer. For example, the U.S. Competition Act of 2022 passed by the U.S. House of Representatives emphasizes support and subsidies for the chip manufacturing industry; the European Commission's announcement of the Chip Act will invest more than 43 billion euros in public and private funds to support chip production, pilot projects and start-ups.
Asian countries have made great efforts to improve the semiconductor supply chain. Chinese mainland has been investing in the expansion of chip manufacturing companies and attaching importance to the localization of semiconductor equipment; South Korea has announced a ten-year chip investment plan with an investment of 510 trillion won, the "K-Semiconductor Strategy"; Japan has established a "Semiconductor Digital Industry Strategy" to strengthen cooperation with overseas companies, jointly develop cutting-edge semiconductor manufacturing technologies and ensure production capacity.
It can be seen that countries and regions with semiconductor industries are emphasizing the importance of supply chains, and the focus of support policies is mostly focused on semiconductor manufacturing, especially advanced processes.
Difficult to buy semiconductor equipment, let the expansion of production under the brake keys?
Although manufacturers are crazy to increase production capacity, the ideal is very full, and the reality is very bone.
In the face of huge demand, all parties hope to build a factory today and produce energy tomorrow. But the fact is that the lack of cores not only causes the world to fall into a serious chip shortage, but also the semiconductor equipment that produces chips has fallen into a production bottleneck.
Therefore, even if the manufacturers finish the factory, it is only an empty shell, and it is difficult to put into production without equipment.
According to statistics, the average delivery time of semiconductor equipment in 2020 is about 6 months, and in 2021 it has been extended to 12 months, and even the delivery time of some equipment takes 18 to 24 months, setting a record for the longest delivery period in the history of semiconductor equipment.
Just this week, ASML CEO Wennink issued a series of "complaints" about Intel's expansion plans, including a warning that "the capacity of lithography machines is difficult to meet customer needs."
Wennink said that since the beginning of this year, ASML has experienced a german factory fire, leica lens shortage and the recent Russian-Ukrainian conflict caused by the neon gas shutdown, a series of objective factors directly led to this year's planned production into a bottleneck, want to ship more lithography machines than last year, but also need to be evaluated with 700 suppliers.
AsML's supply difficulties are just a microcosm of the shortage of semiconductor equipment supply. At the investor meeting held by UMC a few days ago, UMC said that although the wafer foundry is constantly expanding, it is also necessary to sign a long contract with the equipment factory because it is afraid of the shortage of upstream materials, which leads to a slow release of production capacity and can only continue to ensure supply by increasing the production line.
Figure | Production capacity is expected to be in 2022
Therefore, UMC stressed that even if there is an oversupply in the 28nm market, it will be after 2023. Until then, chip manufacturers' pace of expansion will not stop.