Supply chain
Silicon wafer market growth to depend on 12-inch fab expansion, smartphone demand
Tony Huang, DIGITIMES Research, Taipei

Silicon wafer market growth for 2019 will depend on chipmakers' 12-inch fab expansions and smartphone demand, Digitimes Research believes.

The world's silicon wafer producers all had their shipments, revenues and profits remain at high levels as of the end of October 2018. However, uncertainty about demand-side developments has cast a shadow over their business outlook next year.

The global deceleration in smartphone sales and the US-China trade disputes, which may result in a possible slowdown in chipmakers' 12-inch fab expansions, will likely have a negative impact on silicon wafer suppliers' performance in 2019.

On the supply side, combined production capacity at silicon wafer makers has expanded by a larger-than-expected 9.8% this year. If the suppliers grow their combined capacity by another 9% and more in 2019, it will not be easy for them to maintain high profitability next year, Digitimes Research said.

Silicon wafer area shipments are set to increase by more than 7% in 2018, Digitimes Research estimates. For the third quarter alone, area shipments of 12- and 8-inch silicon wafers grew 12% and 5%, respectively, compared to the same period in 2017, while the 6-inch and below segment registered on-year decreases.

Japan-based companies' 12-inch silicon wafer area production and shipments surged 13.5% and 14.7%, respectively, from a year earlier in the first three quarters of 2018. The growths show the related suppliers' aggressive capacity expansions.

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