The global semiconductor supply chain capacity continues to be in short supply. Wang Shi, the co-general manager of the foundry UMC, said in an exclusive interview with the Business Times that semiconductor demand continues to be strong, and the production capacity of the mature process of the 8-inch and 12-inch fabs is more obvious, and the capacity shortage has already occurred. Exceed the increase in capacity. This imbalance between supply and demand will lead to structural changes in the semiconductor market. The structural problem that demand growth is greater than the increase in production capacity is difficult to solve. The shortage of semiconductor production capacity may continue until 2023.

The COVID-19 epidemic has impacted the global economy, but looking back at 2020, the semiconductor market has grown substantially due to the acceleration of digital transformation driven by the epidemic, and the strong demand momentum will continue until 2021, and semiconductor production capacity will be in short supply. Wang Shi pointed out that from the perspective of demand, the shortage of production capacity is due to the simultaneous occurrence of three megatrends from last year to this year. The first is the acceleration of 4G to 5G. The shipment of 5G mobile phones is strong, and the silicon content of each mobile phone is comparable to that of 4G. Compared with mobile phones, an increase of 35%.

The second is that the epidemic has detonated the trend of working from home, which has changed living habits and led to a substantial growth in notebook shipments. This will be a long-term trend. The strong demand for notebooks has not slowed down. Optimists are even optimistic that notebook shipments this year will Look at 300 million units. The third is the bottoming of automotive electronics in the fourth quarter of last year. The adoption rate of automotive electronics such as advanced driver assistance systems (ADAS) in new models has increased significantly. The trend of electric vehicles continues to develop, and the number of chips used in each vehicle has increased significantly. Now automotive chips are seriously out of stock.

Wang Shi said that the demand for 5G mobile phones, laptops, and automotive electronics may continue beyond 2022. To solve the shortfall in demand, it is necessary to increase production capacity. However, from the perspective of supply, the lead time for new fabs has been lengthened, and the equipment delivery period has been as long as 14 to 18 months. Now it is 2023 from investment and construction to production capacity.

From the perspective of foundry process nodes, the demand for advanced processes such as 7nm or 5nm is booming. From the perspective of ROI (return on investment), investment can continue to build factories, but the investment benefits of mature processes above 14nm are full of challenges And it is difficult to recycle. The average price of the foundry industry's process nodes will be discounted every year. After 10 years, the average price is only half, but the cost of building capacity has not been reduced by half, and some 8-inch devices are no longer in production. Unable to achieve large-scale production capacity investment.

Wang Shi pointed out that the CAGR (compound annual growth rate) of the demand for the 14-nanometer process and above will reach 6.6% from 2020 to 2025, but the CAGR of the total annual production capacity is only 1%. The structural problem that demand growth is greater than the increase in production capacity has become the biggest problem in semiconductor capacity shortages.

Wang Shi said that if large-scale investment in the semiconductor industry can solve the problem of insufficient production capacity from now to 2023, the probability of large-scale investment is not high, so the capacity shortage will be difficult to solve from 2022 to 2023. The shortage of semiconductor production capacity is no longer a problem of the cyclical business cycle, but a structural problem. This requires the wisdom of all parties in the industry to see how to deal with it.