Rising Value of 8-Inch Semiconductors...Global Production Capacity Soars Due to Increased Investment and More

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] As the value of semiconductors based on 8-inch (200mm) wafers rises, global semiconductor companies are rapidly expanding their production capacity. Although productivity is lower compared to 12-inch (300mm) wafer semiconductors, the demand for 8-inch wafer-based semiconductors such as automotive semiconductors (MC), power management integrated circuits (PMIC), and display driver ICs (DDI) is surging, leading to a double-digit growth rate in global 8-inch semiconductor production capacity through related equipment investments.

On the 26th, the Semiconductor Equipment and Materials International (SEMI) forecasted that global semiconductor manufacturers will expand 8-inch wafer-based semiconductor production capacity by 17% from 2020 to 2024. In terms of wafer input volume, this means increasing production by 950,000 wafers. Although the monthly production capacity based on wafer input volume was below 6 million wafers last year, SEMI expects that with manufacturers expanding capacity, the monthly production capacity will reach a record high of 6.6 million wafers by 2024.

Ajit Manocha, SEMI Chairman and CEO, stated, "In response to growing demand for devices relying on analog, power management, DDI, and microcontroller units (MCU) for 5G, automotive, and Internet of Things (IoT) applications, wafer manufacturers will add 22 new 8-inch fabs during the same period."

Until a few years ago, 8-inch wafers were gradually being phased out due to lower productivity compared to 12-inch wafers. Subsequently, leveraging their suitability for small-volume, multi-product manufacturing, memory semiconductors such as DRAM and NAND flash, as well as central processing units (CPU), were produced on 12-inch wafers, while automotive semiconductors, PMIC, DDI, and other analog semiconductors were produced on 8-inch wafers, establishing separate markets. Amid this situation, the demand for 8-inch wafer semiconductors surged significantly due to the impact of COVID-19, leading to shortages and renewed attention.

Semiconductor manufacturers are expected to significantly increase investments in factory equipment to expand production capacity. SEMI anticipates that capital expenditure on 8-inch semiconductor fab equipment will reach approximately $4 billion (about 4.5 trillion KRW) this year, surpassing last year's scale of around $3 billion. An industry insider said, "It has become difficult to procure used 8-inch equipment, causing prices to rise sharply, and various measures such as modifying 12-inch equipment are being considered."

Earlier, SK Hynix announced plans to double its 8-inch foundry production capacity. SK Hynix stated it would consider various strategic options including domestic facility expansion and mergers and acquisitions (M&A), and it is reported to be reviewing the acquisition of KiFoundry, which operates an 8-inch foundry business. DB Hitek, ranked 10th in the global foundry market and mainly producing semiconductors based on 8-inch wafers, is expanding its production capacity by 9,000 wafers per month this year to meet customer demand.

This content was produced with the assistance of AI translation services.