Overwhelmed, each of the players in the semiconductor industry, all in water up to their necks and investing in what is already called chip inflation. Expenditure, as we have already mentioned, is skyrocketing, mainly in investment for new FABs, which is confirmed by the president of Sumco, Mako Hashimoto, who also offered a series of data that only make us more worried, as they clearly show that the current crisis is far from over.
FABs at full capacity, full production until 2026
Not only are efforts made to produce 24/7 in the existing factories where there is not enough to satisfy the demand, it is that the production is reserved even for the new ones that are created in these years to the point that, perhaps, it is not possible to supply the levels required in 2026.
The first FABs of new creation and technology will arrive in 2024 and during this year they will be followed by others that will eventually be available in 2025, but the problem is that even with their capacity the supply would not match on demand until 2026.
Hashimoto has publicly stated that this fact is unheard of, that in the 40 years he has had his company and its subsidiaries he has not seen anything like it. But that’s just a middle segment of the industry, so let’s go further down the pyramid.
Substrates and raw materials: overwhelmed
Sumco’s long-term contracts were set until 2026 and their volume left the Asian automaker no choice but to close out reservation orders to start planning for the future from that year. In other words, there is no offer of patties, everything is closed even what is today on a blank plan.
The problem is such that it is not certain that it will be solved in 2026, since, as the graph shows, the common forecasts are of a lag, minor, yes, but they would still be below what TSMC and Samsung would claim.
But the problem is bigger, since Sumco needs substrates and raw materials for its silicon rods, which are also in their own internal crisis. unimicron is one of the largest PCB manufacturers and they are with a 20% deficit Looking ahead to next year, where its numbers are worse for this 2022.
They increased their sales 30% and their revenues are expected to triple by 2026, but this highlights another problem: they are not growing at the rate the industry needs, because although they have 14 FABs producing both ABF Substrates As for raw materials throughout Asia, they cannot meet what companies like Sumco are asking of them in terms of volume.
In short, the messages of optimism from Intel, AMD and NVIDIA are cracking, the price increase of the three musketeers only shows that this year we will continue on the path of deterioration and that 2023 will not be a turning point, again minus the ending, unless everything turns sharply and given what is seen, it doesn’t seem like it.
