Silicon Wafer Makers Face Profit Decline

According to market data, global silicon wafer manufacturers saw their profitability decline in the first half of this year as depreciation expenses from newly commissioned factories began to weigh on earnings. These companies are gradually bringing new facilities online, significantly increasing global wafer production capacity.

Major wafer manufacturers, including SUMCO, Siltronic, and GlobalWafers, made large-scale investments in 2021 and 2022 to expand 300mm silicon wafer capacity. However, amid the semiconductor industry downturn, they delayed full-scale production at some new facilities. With wafer demand now recovering, manufacturers are gradually increasing utilization rates at these plants.

SUMCO plans to progressively expand production capacity through 2027. Its depreciation expenses increased 44% last year to ¥111 billion. Siltronic also recorded a 44% increase in depreciation expenses last year, reaching €343.3 million, with the figure expected to rise to between €490 million and €520 million this year. GlobalWafers expects annual depreciation expenses to increase by 34% from NT$8.927 billion last year to approximately NT$12 billion this year.

As wafer shipments increase and prices rise, the impact of higher depreciation costs is expected to gradually ease. Market research data indicates that silicon wafer consumption for high-bandwidth memory (HBM) is expected to increase 23% next year, while consumption for advanced logic applications is projected to rise 12%. By comparison, 300mm wafer capacity is expected to grow by only 3%.

With supply remaining tight, major silicon wafer manufacturers are negotiating next year's pricing with customers. Discussions are reportedly centered on price increases of around 10% to 15%, particularly for 300mm wafers.