A wirebonding capacity supply glut is arising from fast capacity expansions at OSATs, which may lead them to cut quotes in the second half of 2022 to bolster their capacity utilization, according to industry sources.
OSATs in Taiwan, China and other countries will see their wirebonding capacities increase by 20-40% in the second half of the year from pre-pandemic levels, and medium-sized OSATs are very likely to see their capacity utilization rates fall then as they are mostly short of long-term capacity utilization commitments from clients, the sources said. And such OSATs may be forced to cut prices for more orders to better utilize their additional capacity once backend demand from clients trends downward, the sources continued.
Only leading OSAT ASE Technology, backed by long-term contracts with clients, can continue to maintain regular capacity utilization without having to reduce prices to keep customers, the sources said.
Actually, leadframe makers have confirmed receiving additional orders from ASE Technology and international IDMs, whereas medium-sized OSATs including Lingsen Precision Industries, Greatek Electronics and Orient Semiconductor Electronics have turned conservative about order placements as they are feeling the pressure of wirebonding capacity utilization moving downward, the sources indicated.
Some OSATs have moved to slow down installations of new wirebonding machines already purchased, lest they should suffer low utilization of new capacities, the sources added.
