Gradual rebound or slight dip - two scenarios for COVID-19 impact to 2020 global silicon wafer sales, says SEMI

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KUALA LUMPUR (April 16): Global silicon wafer market sales could dip if uncertainty surrounding the impact of COVID-19 to the semiconductor industry persists or climb on the strength of rebounding chip sales, according to the U.S.-based Semiconductor Equipment Manufacturers International (SEMI).

In its new quarterly report released April 14, SEMI laid out two wafer market scenarios for the second half of 2020.

With the world continuing to combat the novel coronavirus, SEMI expects a drop in silicon wafer sales in the second half of 2020 with possible ripple effects on price negotiations in 2021.

However, it said the question remains whether the uncertainty sowed by COVID-19 will lead to the decline in silicon wafer demand or if the heavy impact will be confined to a few months.

It said that to hedge their bets, chipmakers in the second quarter of 2020 are expected to increase silicon wafer orders to build up safety stock to meet future demand, a move that should soften the impact on sales for the quarter.

SEMI said if the pandemic erodes semiconductor demand well into the second half of 2020, silicon wafer shipments growth could continue through the second quarter before dipping in the third quarter.

It said in this downbeat scenario, 300mm silicon wafer shipments in 2020 would be flat or see a slight decline despite a sizable second quarter jump, and 200mm and 150mm shipments would drop by 5% and 13%, respectively.

“But if a robust industry recovery begins in the second half of 2020, the second quarter inventory buildup will help drive silicon wafer shipment growth.

“That uptrend will continue through the rest of 2020 as expectations rise that pent-up demand will drive a chip industry rebound,” it said.

SEMI said the COVID-19 outbreak earlier this year extended a decline in total silicon wafer area that began after their October 2018 peak.

It said that last year overall wafer shipments dropped 6.9% compared to 2018 after managing just 0.4% growth from 2017 to 2019.

“The 2019 declines in both silicon wafer shipments and revenue had given way to optimism for 2020 with rising expectations for normalising inventory levels, memory market improvements, data center market growth and the 5G market takeoff,” it said.

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