According to Taiwan media Digitimes, the foundry World Advanced (VIS) once again seeks to expand its 8-inch wafer production capacity through acquisitions to meet the growing demand of power management IC, driver IC and CMOS image sensor (CIS) chip suppliers .
The world’s advanced: leading eight-inch wafer foundry experts
According to data, World Advanced Integrated Circuits Co., Ltd. (“World Advanced”) was established in Hsinchu Science Park on December 5, 1994. Since its establishment, the company has continuously improved its process technology and production efficiency, and continued to provide the most cost-effective complete solutions and high value-added services to customers, becoming a leading manufacturer of “special integrated circuit manufacturing services”.
World Advanced currently has four 8-inch wafer fabs located in Taiwan and Singapore. The average monthly production capacity in 2020 is about 240,000 8-inch wafers.
The predecessor of the world advanced is the sub-micron process technology development plan of the Industrial Technology Research Institute. In 1994, the Ministry of Economic Affairs decided to establish a spin-off company in order to implement the effects of this technology project.
In December of the same year, Taiwan semiconductor Manufacturing Co., Ltd. (“TSMC”) and 13 other companies jointly invested in the establishment of World Advanced Integrated Circuits Co., Ltd. to produce and develop DRAM and other memory chips. Main business content.
In March 1998, World Advanced was listed on technology stocks, and its major shareholders included TSMC, the National Development Fund of the Executive Yuan and other legal entities.
In 1999, World Advanced, with the assistance of TSMC, successfully introduced logic product foundry technology and became TSMC’s foundry partner. In 2000, World Advanced officially announced its transformation from a DRAM factory to a foundry company. Afterwards, various foundry processes, including the High Voltage Device process and the 0.18 micron flash memory process, have successfully entered Mass production. In July 2004, World Advanced officially ended DRAM manufacturing and successfully transformed into a 100% foundry company.
In 2007, the world advanced purchase of Winbond’s 8-inch factory, which not only ensures the company’s growth momentum, but also satisfies customers’ demands in terms of production capacity and technology, and provides customers with more choices and competitiveness of products.
In 2014, the world advanced purchased the 8-inch wafer factory in Luzhu Township, Taoyuan County owned by Nanya Technology Institute and undertook the machinery and equipment of Shengpu Electronics.
In January 2019, the world’s advanced acquisition of GlobalFoundries is located in the Fab 3E eight-inch wafer fab, factory facilities, machinery and equipment, and MEMS intellectual property and business in Tampines, Singapore. The settlement was completed on December 31 of the same year according to the agreement. The company has officially taken over the operation of the plant and has become the world’s most advanced Singapore subsidiary. Through the three mergers and acquisitions listed above, the world advanced not only has the opportunity to expand production capacity, but will also maintain growth and stable profitability in order to continue to give back to shareholders.
The world’s advanced technology makes full use of the core expertise of existing technologies, in line with industry fluctuations and market growth needs, and continues to increase product and investment process research and development. The current process technologies that continue to be researched and developed include high voltage, ultra high voltage, and BCD (Bipolar CMOS DMOS) process, SOI (Silicon on Insulator), discrete components (Discrete), logic process (Logic), mixed-signal process (Mixed-Signal), analog signal process (Analog), HPA (High Precision Analog) process , Embedded Memory (Embedded Memory), and micro-electromechanical (MEMS) technology, etc., to help enhance customers’ competitiveness in the global market.
The world’s advanced said that the company has seen performance in the operation of Display driver ICs, power management ICs and discrete power components. In order to diversify products and market concentration, reduce operational risks, and cultivate high-margin markets, in addition to the existing high-voltage analog, BCD, In addition to the ultra-high voltage process, the company continues to accelerate the implementation of programs such as sensor components, fingerprint recognition ICs, high-power power management ICs, and embedded memory platforms to cope with the advent of the energy-saving and carbon-reduction era, and to meet the needs of automotive electronics and the Internet of Things. Market demand. We believe that the above-mentioned efforts will help promote the company’s overall operations, ensure the company’s leading position in special wafer foundry, and become one of the leading manufacturers of high-voltage and power semiconductor processes in the global wafer foundry field.
8 inches full at least until the first half of 2021, medium and long-term demand is optimistic
In response to this wave of 8-inch heat, the world’s advanced chairman Fanglue believes that compared with 2017, there are “structural” changes this time, including the demand driven by changes in lifestyle, and the demand for semiconductors from smartphones and 5G. The improvement, especially the consumption of power management IC is very large, and the demand from the car is not high this time. It is expected that until the first half of 2021, the company will maintain a high level of capacity utilization, and is optimistic that these structural changes will support the medium and long-term demand for 8-inch foundry.
For longer-term planning, the world’s advanced and UMC’s production capacity layout attitude is also very positive. The two major manufacturers have stated that they will continue to seek suitable merger and acquisition opportunities in the future. It is worth noting that the world and UMC have only bought the 8-inch factory in Singapore and the 12-inch factory in Japan in recent years. They are in the running-in phase this year, and the gross profit margin has not caught up with the average level. Capacity can be used effectively.
In terms of performance prospects, the current foundry Sanxiong has released quite positive messages. TSMC’s estimate was based on NT$28.75 to US$1, and its single-quarter revenue fell at US$12.4-12.7 billion (equivalent to NT$356.5 billion-365.125 billion), a quarterly increase of 2.1-4.6%. The legal person is optimistic that TSMC is not only fully loaded with advanced processes below 16nm, but also benefited from the SMIC transfer order effect at 28nm, which was difficult to fill in the past. The current utilization rate has reached 100%, and the company is expected to deliver results that are better than financial estimates.
UMC estimates that overall wafer shipments will grow by 1-2% compared with the previous quarter, and the average selling price (ASP) in US dollars will increase by 1% quarterly; the legal person estimates that the fourth quarter revenue is expected to increase by 2~3% quarterly. ; The world’s advanced estimate is based on NT$28.6 per U.S. dollar, and this quarter’s revenue will be approximately 8.4-8.8 billion yuan, a quarterly increase of 0.71%~5.5%. On the whole, there is no suspense in the fourth quarter and full-year revenue of the foundry Sanxiong.
However, the legal person also reminded that the industry has recently begun to hear the noise of repeated orders (overbooking), and the current semiconductor inventory level remains high, follow-up needs to observe the situation of terminal demand and inventory depletion. In addition, the results of the US presidential election are about to come out. If Joe Biden (Joe Biden) takes office, there may be a change in China’s policy, and whether Taiwanese factories that have benefited from the benefits of the trade war in the past can continue to maintain their advantages requires close attention.
Rare, fab bidding capacity?
The 8-inch foundry capacity is in short supply. The industry has reported that an established wafer foundry on the island of China has recently advanced part of the 8-inch foundry capacity in the second quarter of next year in an unprecedented way to provide customers with bidding. For goods, production capacity is allocated by the “higher price” method. If more production capacity is required, it must be obtained through competitive bidding. The unit is “piece”. It is reported that the price of each wafer has increased by 30 to 40%.
This is an unprecedented emergence of the foundry industry to compete for production capacity through bidding. In particular, the bidding is based on “pieces”, and the bidding price for each wafer has increased by 30 to 40%. For IC design houses that need to add thousands of pieces at every turn, the pressure is not small. These higher prices are all the “more profit” of the fab, which will be reflected in the gross profit margin and profit in succession.
According to industry insiders, the electronics industry uses “bidding” to grab goods. The most famous one is the passive component shortage boom from 2017 to 2018. At that time, many manufacturers could not meet the needs of all customers, so they could only compare auctions to bidding. The way to let the buyer bid for the source of materials, the higher the price will get. This bidding wind has blown to the 8-inch wafer foundry industry, which is the first time in history. It also highlights the grand occasion of the IC design industry vying for production capacity.
In the environment of the pneumonia epidemic, the semiconductor industry is not only slightly affected this year, but also benefited from the increase in some related demand. The demand for foundry capacity is expected to continue next year.
The IC design industry revealed that for next year’s foundry capacity allocation, an old-brand foundry’s approach is to give a 10% discount based on this year’s order quantity, that is, for example, IC design customers will drop 100,000 chips this year. Only 90,000 pieces will be allocated next year, and the price will be increased by about 10% from January 1 next year.
However, in response to the continued growth of customer orders next year, some IC design companies can only have more capacity than less. Therefore, they negotiated with the fab to increase the amount of additional film and put a fixed amount of price increase on top of the price that has already been adjusted.
Due to the fact that the production capacity of wafer foundry is really overwhelming, strange goods can be occupied, from 8 inches all the way to 12 inches. Recently, it has also been reported that there is an old wafer foundry that will take a small part of the production capacity of about a few thousand wafers in the second quarter. Come out and let the IC design industry in need bid.
The IC design industry revealed that the foundry price of an 8-inch wafer ranges from approximately US$300 to more than US$600, depending on the use of the process and the different plant areas. between.
The industry said that it will participate in the wafer capacity bidding. There are several main considerations. One is that the relevant bidding quota does not account for a high proportion of the overall casting volume, but if the product supply is insufficient, customers will run away. Although the price increase will increase the cost, some of it can be passed on to the customers. In addition, because its gross profit margin is high enough, the cost increase is still within a tolerable range.