We have had serious supply problems for two years in key components of the industry where manufacturers are dealing with prices and times that are not normal. The demand for main materials and even those that are secondary has dashed all hope and although production is increasing in 2022, the crisis will not end when predicted. Not at least for the latest report provided, where the forecasts for semiconductors are much worse than expected.
We have been saying it this week and today we already have confirmation thanks to the investigation carried out by the firm Techcet , which affirms very interesting things that we already intuited and anticipated. And it is that despite the efforts of the industry and its steps forward in terms of production, the shortage of chips will remain with us for a longer time, too much…
Semiconductor forecasts are not good
The projection of the most important component for any chip, its wafers, is not being as expected and is insufficient for the current market despite the fact that shipments and therefore sales are slowing down. In other words, not enough chips and wafers are produced despite the fact that demand is falling, which is obviously a major problem because the forecasts with these semiconductors are far from being finished.
To give concrete data, the report states that no less than 7,200 units per month (WPM) are being launched in the most common 300 mm wafers, a value that is close to what was expected, but by customizing the chips to a higher level for customers it seems that this is delaying some of the volume and manufacturers despite sending less are increasing demand.
We already saw this scenario yesterday and it could lead to inflation in the sector where supply is ahead of demand and then investment forecasts fail when the money has already been spent and put into practice, which would leave higher prices if we take into account everything said for the chips.
Scarcity, time and China
SEMI, the consortium of wafer manufacturers gives more encouraging data, but these have a double background at the same time. And it is that despite the fact that the capacity of the 200 mm wafers has reached the record of 6.9 million per month and that manufacturers are moving to these because of their greater volume, these figures are not really good as such.
Revenues will grow for these more than 14% in this 2022 and it is estimated that the production capacity will increase no less than 21% until 2024 , where it is now ensured that supply and demand should begin to stabilize. In other words, the semiconductor crisis should be over by the end of 2024 or early 2025 where there would be chips for everyone.
This is due in part to the fact that manufacturers’ investments in their FABs, such as new ones from Intel and TSMC, will be ready in at least the next two years, bringing more chips to market. But what if demand continues to fall? The PC market is in the doldrums, telecommuting has reached stable levels, the car industry is experiencing record sales in the negative, and something similar is happening with smartphones.
If this trend continues like this, the crisis would not end in 2024 or 2025, obviously, but that would not cause prices to drop because, as we say, the investments will be in vain, the projects would already be started and a large part of the money would be spent for a capacity that would not be so necessary Therefore, in the end, it would be the consumer once again who would have to pay a price premium to offset the losses, since no chipmaker can do anything about it except Intel.
To all this China is fishing in troubled waters, since its wafer FABs are selling more than ever supported by the demand that other manufacturers cannot cover at the moment, the problem is that the numbers still do not add up for now since the The country is facing a terrible wave of COVID-19 and, on top of that, the price of energy continues to skyrocket, which does not make it any easier that, despite the fact that more chips are sold, they drop in price. Is the perfect storm ahead?