Price of silicon wafer, which is one of raw materials for semiconductor, shot up by 20% compared to its price from last year and this is causing amount of supplies to not be able to keep up with increased demands. As SK Siltron (previously LG Siltron), which is the only South Korean wafer manufacturer that was acquired by SK Group from LG Group, is also facing lack of supplies, it is expecting positive performance this year such as making $893 million (1 trillion KRW) in annual sales again this year.

SUMCO, which is a Japanese silicon wafer manufacturer, recently announced forecast of its performance for fourth quarter and estimated that price of 300mm wafer will be at least 20% higher than that from fourth quarter of last year. SUMCO is a leading silicon wafer manufacturer that is accounted for two-thirds of global silicon wafer markets along with Shin-Etsu Chemical.

SUMCO is adjusting price of its silicon wafer after making long-term supply and demand contracts with major semiconductor manufacturers based on yearly, semi-annually, and quarterly prices. Due to an increase in price of silicon wafer that started from early this year, SUMCO is expecting to make its biggest performance in recent 10 years since global financial crisis in 2008.

“We are also planning to increase price of silicon wafer by 20% in 2018.” said CEO Hashimoto Mayuki of SUMCO. “Price of silicon wafer will continue to rise in 2019.”

According to CEO Hashimoto, number of global demands for silicon wafers for producing 300mm semiconductors is currently 5.6 million units per month. Memory industries are continuing to announce their plans for extension of their production facilities one after the other. SUMCO is estimating that number of global demands in 2020 will be 6.6 million units per month.

On the other hand, silicon wafer industries are limiting themselves from making extensions of their facilities as price of silicon wafer can fall once they increase amount of supplies. Silicon wafer industries had already struggled until last year since the global financial crisis in 2008. This is one of the reasons why LG Group sold SK Siltron to SK Group.

SUMCO is planning to increase monthly output of 300mm silicon wafers by 110,000 units in 2019. Siltronic from Germany is planning to increase its monthly output by 70,000 units. Although Shin-Etsu is also planning an extension, experts predict that amount of its extension will not be enough to completely absorb number of demands.

“Level of demands from wafer industries towards increase in price of wafer can be met as fixed market price of PC DRAM, which is one of main memory products, in October is increased by almost 170% compared to June of last year when its price started to rise.” said a representative for an industry. “Price of silicon wafer will continue to go up as wafer industries will continue to show lukewarm stance towards extensions.”

SK Siltron also withdrew from 150mm wafer business and is currently extending its facilities for 300mm wafers. Markets estimate that SK Siltron will be able to make $893 million (1 trillion KRW) in annual sales once again this year due to a rise in price of silicon wafer. It is heard that SK Siltron already exceeded its expectations for its performance in first quarter and first half of this year. Although SK Siltron made more than $893 million in annual sales from 2010 to 2012, its annual sales fell between $625 million and $714 million (700 billion KRW and 800 million KRW) after wafer industries started to increase amount of supplies of wafers.

SK Group purchased 51% of SK Siltron’s shares from LG Group for $554 million (620 billion KRW) early this year. It also purchased 19.6% of SK Siltron’s shares owned by KTB Private Equity. Chairman Choi Tae-won of SK Group also secured 29.4% of SK Siltron’s shares in his private capacity.

Staff Reporter Han, Juyeop | powerusr@etnews.com