SMIC recently announced that SMIC, Tianjin Xiqing Economic Development Group Co., Ltd. and Tianjin Xiqing Economic and Technological Development Zone Management Committee jointly signed and signed the framework agreement on SMIC Tianjin 12 inch wafer foundry production line project.
The total investment of the project is US $7.5 billion. SMIC will build a 12 inch wafer foundry production line with a capacity of 100000 pieces / month in Tianjin, which can provide wafer foundry and technical services at different technology nodes of 28nm-180nm. The products are mainly used in communication, automotive electronics, consumer electronics, industry and other fields.
This also means that SMIC has a 12 inch wafer factory under construction in Shanghai, Beijing, Shenzhen and Tianjin, which is rapidly improving the domestic mature process capacity.
According to the statistics of China CITIC construction investment, at present, in addition to Beijing (with an investment of US $7.6 billion and a planned production capacity of 100000 chips / month), Shenzhen (with an investment of US $2.38 billion and a planned production capacity of 40000 chips / month), Shanghai (with an investment of US $8.87 billion and a planned production capacity of 100000 chips / month) each has a 12 inch wafer factory under construction, and SMIC has added four 12 inch wafer factories, with a total investment of US $26.35 billion and a total planned production capacity of 340000 chips / month.
According to the analysis of CSC, against the background of the semiconductor boom differentiation, the main purpose of SMIC’s expansion against the trend is to respond to the national policies, strengthen the local manufacturing capacity, and provide guaranteed OEM services for domestic semiconductor manufacturers in the future, “We believe that in the short term, the smartphone market will be weak due to inventory removal, but the demand for automotive electronics and emerging consumer will remain strong, and the supply and demand of the industry will tend to be balanced and accompanied by structural adjustment. The counter trend expansion of SMIC confirms that the trend of semiconductor localization in the medium and long term remains unchanged, the logic of semiconductor industry demand growth and transfer to local manufacturing remains unchanged, and the wafer foundry industry will continue to improve.”
SMIC also mentioned in the financial report that in the first half of 2022, the market in various sub sectors showed multipolar differentiation. The global wafer foundry capacity changed from comprehensive scarcity to structural shortage. The demand of the stock market represented by smartphones and personal computers gradually slowed down. The emerging incremental markets represented by the Internet of things, data centers, artificial intelligence, new energy vehicles, etc. put forward higher requirements for capacity and technological innovation.
At the same time, the industry’s expectation of the regional adjustment of the industrial chain still exists. Based on the worry about the regional division of the supply chain, the local production demand of end customers accelerates, resulting in a local capacity gap. For this reason, SMIC has planned ahead of schedule, further optimized production capacity, continuously launched new product process platforms, locked the stock, actively explored the increment, and maintained a stable investment intensity.
Under the background of core shortage in recent years, the most important production capacity is the mature process, and the demand for 12 inches is further enlarged. For example, according to the research of trendforce, PMIC and audio codec have successively switched to 12 inch manufacturing, relieving the shortage of 8 inch production capacity.
Earlier, Zhao Haijun, the joint CEO of SMIC, said at the financial report telephone conference that in the first half of the year, the integrated circuit industry chain was affected by the double cycles of the global economic macro cycle and the semiconductor market itself entering the downward cycle, which brought some panic and uncertainty to the market. At present, this round of cycle adjustment will last at least until the first half of 2023. When it ends depends on the macro trend, the recovery pace of consumer demand, and the de stocking of the industry. In the first half of 2022, SMIC realized an operating income of 24.592 billion yuan, a year-on-year increase of 52.80%; The net profit attributable to the parent company was 6.252 billion yuan, with a year-on-year increase of 19.30%.
Besides SMIC, Huahong, Yuexin, TSMC and other enterprises are also expanding mature production capacity. Huahong semiconductor plans to accelerate the expansion of the total capacity of the 12 inch production line to 94.5k in 2022, and is expected to gradually release the capacity in the fourth quarter.
A few days ago, the third phase of Yuexin semiconductor project officially started. The total investment of the project is 16.25 billion yuan. A 12 inch integrated circuit simulation characteristic process production line with a capacity of 40000 pieces / month will be built. It is planned to be put into production in 2024. It is mainly applied to power device chips, signal chain chips, power management chips, microcontroller chips and image sensors of power electronics, servers / 5G base stations and automotive electronics.
TSMC is also increasing the expenditure on mature production capacity. It is reported that in order to solve the shortage of chip production capacity for automotive and industrial control, the production capacity of TSMC’s special mature process will increase by 14% compared with last year, and its proportion in the overall mature process will also increase to 63%.
At the same time of the mature capacity competition, the global wafer factories are starting a new round of production expansion. Intel, lattice, Texas Instruments, Samsung and other large companies are also building new wafer factories. For example, Intel is currently building four wafer factories in the United States, lattice is planning to build new factories in New York, and analog chip giant Texas Instruments will also spend 10 billion US dollars to build large factories. With the introduction of chip related policies in the United States, Europe, South Korea and other regions, the competition in chip manufacturing will become more intense.
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