January 23, 2021
Semiconductor packaging and testing production capacity continued to be tight in the first half of this year. Leading manufacturer ASE Investment & Control swept over thousands of bonding machines, and the delivery time of machine equipment was greatly extended to more than half a year, which means that the expansion of bonding and packaging capacity in the first half of the year was very limited. Due to the continuous influx of orders, ASE's production capacity will be full until the second half of the year, and orders for wire bonding and packaging including Huatai, Lingsheng, and Chaofeng are also blocked.
Generally speaking, orders in the first quarter will have to be queued up to the end of the second quarter to enter mass production at the earliest. After ASE's production capacity was severely tightened and prices were increased, the industry has followed up, and the price of wire-bonding packaging will be adjusted quarterly to the second half of the year. ASE Investment Holdings will hold a corporate briefing session at the end of January, and is optimistic about its operations in 2021. Its operations have grown quarter by quarter throughout the year, and revenue and profit will reach new highs.
Affected by the dual impact of the new crown pneumonia epidemic and insufficient chip supply, the shipments of packaging and bonding machines in the first half of the year have been limited. However, the leading manufacturers of ASE and Amkor have successively swept the machines. The lead time for packaging and wire bonding machines has been extended to more than 6 months. Among them, ASE Investment Control grabbed thousands of wire-punching machines, and the Nanzi Phase II plant was fully expanding its new production capacity, but it was necessary to complete the installation and start mass production of orders. The time point fell in the second half of the third quarter.
Due to the limited expansion of wire-bonding and packaging capacity in the first half of the year, orders from customers continue to emerge. In addition to the continued strong demand for mobile phone and laptop related chips, including game consoles, servers, 5G base stations, WiFi equipment, automotive electronics and other chip packaging Orders continue to increase. ASE has the world's largest wire-bonding and packaging production capacity, and the demand is still in short supply. The capacity gap is estimated to reach 30%. Second-tier packaging and testing plants including Huatai, Lingsheng, and Chaofeng are also fully loaded with orders, and order visibility has seen the third season.
As the production capacity of wire-bonding and packaging is tight and difficult to relieve, ASE is expected to increase prices quarter by quarter in the first half of the year after the price increase in the fourth quarter of 2020. The cumulative increase will be as high as 20-30%. After the price increase, some excesses are suppressed. The order is placed, but it still cannot withstand the continuous emergence of orders. For companies such as Huatai, Lingsheng, Chaofeng, etc., they have followed the pace of leading manufacturers to increase prices. With full production capacity, the industry is optimistic that there will be room for further increase in the packaging prices in the second and third quarters.
In the fourth quarter of 2020, packaging production capacity has been tight. In the fourth quarter of 2020, ASE Group's consolidated revenue increased by 20.8% quarter-on-quarter to 148.877 billion yuan, a record high, a growth of 28.3% compared with the same period in 2019, and maintained in the first quarter of 2021 In a positive view, the group’s consolidated revenue will be reduced by about 10% in the quarter, but it will rewrite the historical high for the same period.
As for the second-tier packaging and testing industry’s revenue performance in the fourth quarter of 2020 is better than expected, they maintain an optimistic view of the first half of the year. The legal person predicts that the revenue performance of the first quarter of 2021 will be approximately the same as the previous quarter, in the second and third quarters. After entering the peak season, the growth momentum will continue to strengthen, and there will be a significant growth rate compared to the same period in 2020.
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