The wave of AI production expansion drives the supply and demand of the silicon wafer industry to improve, and the price recovery establishes a price increase cycle

The wave of AI production expansion is sweeping upstream and downstream, and the silicon wafer group is welcoming a price increase cycle. (Reuters)

[Reporter Lin Yiru/Special Report] The expansion of AI chip and memory production continues, and the supply and demand structure of the upstream silicon wafer industry is ushering in a turning point. From advanced processes, advanced packaging to HBM (high bandwidth memory) and other AI-related applications, demand is rising. temperature, and further spilled over to mature processes, driving the demand for silicon wafers of all sizes to recover simultaneously. With the tight supply of 12-inch silicon wafer production capacity and rising spot prices, the trend of long-term price increases has gradually been established, and the silicon wafer industry has once again started a price increase cycle.

The major silicon wafer manufacturer Global Crystal (6488) returned to the golden stock market last week. On Friday, the stock price once again hit the upper limit of 1,190 yuan, soaring 25.5% in a single week. Taiwan Sembcorp (3532) surged 5% last week, and Hejing (6182) also surged 12%.

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Xu Xiulan, chairman of Global Crystal, is optimistic that as customers continue to expand factories and increase production capacity on a large scale, the output value of the silicon wafer industry will maintain double-digit growth in the next two years, and shipments and sales prices will increase simultaneously. She also pointed out that Global Crystal's revenue related to advanced packaging was still very small last year. This year, a part of its revenue has begun to come from advanced packaging, and she views the related layout positively.

The legal person is optimistic that as the supply of 12-inch silicon wafers continues to be tight, the spot price in the fourth quarter has the opportunity to exceed the long-term contract price. Global Wafer's new long-term contract price increase trend in 2027 is gradually established. Among them, the estimated price increase of 12-inch epi wafers is 15% to 25%, which is mainly suppressed by TSMC's low acceptance of price increases. The increase in polished wafers may reach more than 40%, driving Global Wafer's strong profit growth next year.

Taiwan Sembcorp has benefited from the demand for AI to promote the construction of data centers, and the related 12-inch advanced process wafers are in strong demand. It continues to expand sales of 12-inch advanced process silicon wafers, and has also introduced SUMCO's 12-inch advanced process silicon wafer technology. It is also working with customers to develop high-end process applications, moving towards high-end logic silicon wafer layout, and laying out CoWoS advanced packaging, 3D packaging and HBM silicon wafers.

AI has driven demand for advanced processes and advanced packaging, and has further spilled over to mature processes. Silicon wafer supply and demand have improved significantly since the second quarter of this year. Hechip's 6-inch, 8-inch and 12-inch production capacity has been close to full capacity since the second quarter, and the price of 6-inch and 8-inch products has increased by about 10% in the first half of the year. The legal person is optimistic that in addition to the continued price increase of 6-inch and 8-inch products in the first quarter of next year, Hejing is also expected to follow up and increase the price of 12-inch silicon wafers, driving revenue and profits to increase simultaneously.

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