COVID-19 could prompt 13% drop in 150mm wafers, SEMI says

Global silicon wafer sales could drop in late 2020 depending on the progression of COVID-19 and its impact on the worldwide economy, according to the SEMI industry association.

The group laid out two wafer scenarios for the second half in a new report.  One scenario expects a drop of silicon wafer sales in the second half of 2020 with a possible ripple effect on price negotiations lasting into 2021. 

The group’s downbeat scenario says 300 mm shipments in 2020 would be flat or slightly decline, despite a second quarter jump, while 200 mm and 150 mm shipments would drop by 5% and 13% respectively.

“The question remains whether the uncertainty sowed by COVID-19 will lead to the decline in silicon wafer demand or if the heavy impact will be confined to a few months,” the report said. “To hedge their bets, chipmakers in the second quarter are expected to increase silicon wafer orders to build up safety stock to meet future demand, a move that should soften the impact on sales for the quarter.”

However, if the pandemic erodes semiconductor demand well into the second half of the year, wafer shipment growth could continue in the second quarter and the dip in the third quarter, the association said. In that case, the downbeat scenario would occur with the biggest impact on 150mm shipments, down by 13%.

If a robust industry recovery begins in the second half of 2020, the inventory built up in the second quarter will drive silicon wafer shipment growth through the rest of 2020 “as expectations rise that pent-up demand will drive a chip industry rebound,” SEMI said.

COVID-19 has so far extended a decline in total silicon wafer shipments that started after a peak in October 2018. Overall wafer shipments in 2019 were down by 6.9% compared to 2018, after growing just 0.4% for two years from 2017 to 2019. Before COVID-19 hit, manufacturers were optimistic that 2020 would see a normalization in inventory levels based on memory market improvements, data center market growth and 5G market takeoff.

SEMI represents more than 2,100 companies in the business of electronics design and manufacturing.

In another report, SEMI said that semiconductor equipment makers saw a 7% drop in sales in 2019, reaching nearly $60 billion..

The prior year, 2018, reached an all-time high of $64.5 billion.

Taiwan topped the market for semi equipment sales in 2019, growing by 68% to $17 billion, replacing Korea in the top spot. China finished second with $13.4 billion, followed by Korea at nearly $10 billion, a decline of 44%.

North America sales jumped 40% to $8 billion in 2019, for a third consecutive annual increase.  The data is a summary of monthly billings.

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