'Definitely Coming'... Waiting for Semiconductor Rebound, Welcoming Wafers Too

SK Siltron to Invest 2.3 Trillion Won by Next Year to Expand Wafer Factory
Mass Production Scheduled for 2024...Timing Aligns with Semiconductor Industry Capacity Expansion

SK Siltron 12-inch Silicon Wafer Manufacturing Facility / Provided by SK Siltron

[Asia Economy Reporter Kim Pyeonghwa] As the semiconductor market downturn intensifies, not only the semiconductor industry but also the wafer industry continues to announce large-scale investments. Since the semiconductor market experiences fluctuations, there is a possibility of significant demand expansion following the sluggish phase, prompting companies to secure production capacity (capability) in advance.

According to the semiconductor industry on the 2nd, SK Siltron held a board meeting on the 29th of last month and approved an investment budget of 855 billion KRW to expand its 12-inch (300mm) silicon wafer factory. This investment is a continuation of the wafer expansion investment plan announced in March. At that time, SK Siltron announced plans to invest a total of 1.0495 trillion KRW to build a wafer production facility covering 42,716㎡ in the 3rd Industrial Complex of Gumi National Industrial Complex, Gyeongbuk.

SK Siltron plans to invest a total of 2.3 trillion KRW in three phases from this year through 2026. With 1.9045 trillion KRW of investment already confirmed, the remaining 400 billion KRW will be additionally reviewed in consideration of the management environment in the first half of next year. At the time of the investment announcement in March, SK Siltron President Jang Yong-ho explained, "This expansion investment is a challenging investment for accurate prediction of market environment changes and agile response."

Although SK Siltron is currently experiencing a slowdown due to the semiconductor market's sluggish growth, it is making bold investments based on the characteristic semiconductor cycle of repeated fluctuations, expecting a rebound. Earlier in August, the World Semiconductor Trade Statistics (WSTS) significantly lowered the semiconductor market growth rate for this year from the June forecast of 18.7% to 8.2%. The growth rate for next year was also lowered to 4.6%. SK Siltron sees that the 12-inch wafer accounts for over 70% of total silicon wafer consumption, and anticipates that existing production volumes will be insufficient if demand increases with a market rebound. Especially given the semiconductor industry's nature, where large-scale investment decisions, facility construction, and product mass production take several years, proactive investment is essential.

SK Siltron aims to start mass production of 12-inch silicon wafers at the new production facility in the first half of 2024. This timing aligns with when semiconductor companies consuming wafers begin to expand capacity in earnest. SK Hynix announced last month plans to expand its M15X factory in Cheongju, Chungbuk, targeting mass production in 2025. Samsung Electronics plans to start mass production in the second half of 2024 at its foundry factory under construction in Taylor, Texas, USA. Micron in the US also recently began building a memory semiconductor factory in Boise, Idaho, aiming for mass production in 2025.

A semiconductor industry insider said, "The market expects the down cycle to last until 2023 and anticipates a rebound and growth from 2024. When the rebound occurs, demand will increase, and if not properly addressed, supply shortages could arise. Therefore, many companies view the down cycle as short and invest targeting similar timeframes."

Related industries foresee that the supply shortage relative to wafer demand could worsen until 2026. Accordingly, investments by other wafer manufacturers continue alongside SK Siltron. Taiwan's GlobalWafers announced plans to invest 2 billion USD (approximately 2.882 trillion KRW) to build a new factory in Texas, USA, targeting mass production in 2025.

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