Supply chain
Top silicon wafer makers post revenue falls in 1Q20, says Digitimes Research
Jim Chien, Taipei; Willis Ke, DIGITIMES

High inventory levels at clients in late 2019 and the coronavirus outbreak early this year combined to send first-quarter 2020 revenues of the world's top-2 silicon wafer suppliers Shin-Etsu Chemical and Sumco, both based in Japan, suffering on-year falls. But unexpected short-term robust demand stoked by the pandemic and long-term agreements with clients are expected to bolster their overall results for first-half of the year, according to Digitimes Research.

The market still sees certain demand momentum for silicon wafers in both second-quarter and second-half 2020, but suppliers share the view that actual demand visibility will depend on the development of the pandemic in the second half of the year.

Many semiconductor firms initially pinned much hope on increasing 5G, electric vehicle and AI applications in 2020, but the unexpected pandemic has crippled global economic activities, yet creating short-term demand for PCs and datacenter servers needed to support remote work and learning amid pandemic-induced lockdowns, Digitimes Research noted.

Holding high ratios of long-term agreements with clients, both Shin-Etsu and Sumco still maintained high capital expenditures in first-quarter 2020 and are not expected to significantly cut second-quarter spending, depending on the development of the pandemic. But Germany-based Siltronic has clearly noted that its 2020 capex will shrink 44.4% on year to EUR200 million.

In 2019, global semiconductor sales plunged 12.1% with memory shipments posting the highest annual fall of 32.6% among diverse segments, driving up silicon wafer inventory levels at clients and dragging down total shipments in area and value by 7.2% and 2%, respectively. But 12-inch silicon wafer shipments saw a lower annual fall than the industry average in the year bolstered by demand for high-end logic components, while shipments of 8-inch and under wafers slackened.

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