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According to the latest report from TrendForce’s Semiconductor Research Office, the collection of micro-net news is limited by the full capacity of upstream foundries such as TSMC and UMC, and the shortage of downstream packaging and testing capacity, including Phison and Silicon Motion and other NAND Flash controller manufacturers Unable to meet the customer's demand for adding orders. In addition to suspending quotations for the demand for new orders, these controller manufacturers will face an increase in controller prices due to the current critical period for price negotiation in the first quarter of 2021, with expected increases ranging from 15% to 20%.

On the supply side, thanks to the strong demand for chromebooks and TVs, which pushed up the demand for low- and medium-capacity eMMC products (including 64GB and below), most of the original manufacturers have stopped updating such products, only using 2D or 3D NAND 64 In response to older processes such as layers, the proportion of the old process in the original factory’s supply continues to decline. In consideration of profitability, the original factory’s willingness to directly supply is reduced, prompting customers to obtain NAND Flash components and controllers from the module factory Volume.

The analysis pointed out that although the current overall NAND Flash market is still in a state of oversupply, the insufficient capacity of controllers makes the supply of low and medium capacity shortages. The price increase of this component may lead to an increase in fixed costs, and OEMs and other purchasers will also put pressure on it, which may cause some of the capacity products (such as 32/64GB required for chromebooks) with strong demand from module factories to be available in the first quarter of 2021. The price increase is possible.

In terms of SSD products, the supply is dominated by original manufacturers such as Samsung, and most of them are in-house products. They have relatively long-term capacity arrangements with wafer foundries, and there are currently no reports of price increases or shortages. However, TrendForce has also observed the extended delivery period, coupled with the trend of PCIe 4.0 generation products to expand the proportion of outsourcing vendors, which means that the possibility of future price trends being affected by outsourcing vendors will increase.

8-inch wafer foundry, 10%-20% increase in the first quarter of next year

The foundry capacity is in short supply, and the visibility of orders will reach the end of the second quarter of next year. Except for the leading manufacturer TSMC, which has indicated that it will not raise prices, including UMC, World Advanced, etc., have adjusted the urgent orders and new orders for 8-inch wafer foundry Increase prices. Since the US issued the SMIC ban, the 8-inch wafer foundry capacity gap has continued to expand, South Korea’s 8-inch wafer foundry Dongbu Hi-Tech will increase the foundry price of 2021 by 10%-20%. The legal person expects UMC to be the world’s advanced , Power Semiconductor Corporation and others are expected to follow up and increase prices in the first half of 2021.

The US Department of Commerce included the Chinese foundry SMIC on the list of entities. Advanced process-related equipment and technologies below 10nm are banned in principle, but process-related equipment and consumables above 10nm can be released after applying for US permission , But the industry believes that it is too difficult to obtain a US license. Therefore, SMIC can maintain normal operations in the short term. However, after 2021, it will face problems such as shortage of equipment spare parts and increased difficulty in capacity maintenance. SMIC customers such as Qualcomm, Broadcom, and local IC design plants are actively seeking Taiwan and South Korea. Capacity support for local foundries.

However, the supply of foundry capacity in the second half of the year is in short supply, and the capacity of 8-inch foundry is severely tight. Orders have been scheduled to the end of the second quarter of next year. As SMIC customers seek out capacity, the supply of 8-inch foundry will be in short supply. Extend the whole year of 2021. Due to the continuous influx of orders, UMC and World Advanced have increased prices for urgent orders and new orders in the fourth quarter, with an average increase of about 5-10%. Although Taiwan's foundry said that it may continue to increase prices in the first half of 2021, it has not yet let go. Instead, South Korea East Hi-Tech has reported that the price of 8-inch wafer foundry will increase by 10% to 20% in 2021.

According to foreign media reports, South Korea East Hi-Tech has successively completed 2021 capacity and price negotiations and signed contracts with customers. In 2021, the price of 8-inch wafer foundry will rise by 10% to 20%. Although customers originally refused to increase prices, due to capacity Insufficient and unable to find other plans, and finally still accept the new contract after the price increase. Furthermore, South Korea’s two major memory makers Samsung and SK Hynix have allocated 8-inch fab capacity to foundries, and it is reported that they will increase prices in 2021.

The industry pointed out that the use of 5G smart phone power management ICs or power components has doubled, coupled with strong notebook shipments, the rapid increase in the purchase of automotive electronics, and the large-scale shift of SMIC orders, requiring more 8-inch foundry capacity support However, in the past 3 to 5 years, there has been almost no new investment in 8-inch production capacity. It is inevitable to increase prices in the case of severe capacity shortages. After Korean companies increase prices, Taiwanese companies including UMC, World Advanced, Power Semiconductor Manufacturing Co. Will follow up with the price increase, and the industry currently expects that Taiwan’s 8-inch wafer foundry prices will increase by 10-15% in the first half of 2021.