ICCAD 2020: Is the reason for the shortage of chips really just insufficient wafer capacity?

In the recent semiconductor industry, few topics resonate more than stockouts. Affected by the continuous shortage of 8-inch wafer production capacity, there have been news of price increases for components such as MOSFETs, driver ICs, and power management ICs. Since the launch of the iPhone 12, the shortage of chips has spread in the field of consumer power supplies, and there has even been a case in the industry that “the CEO of a chip design company kneels to the executives of the foundry in order to obtain production capacity”…

In the recent semiconductor industry, few topics resonate more than stockouts. Affected by the continuous shortage of 8-inch wafer production capacity, there have been news of price increases for components such as MOSFETs, driver ICs, and power management ICs. Since the launch of the iPhone 12, the shortage of chips has spread in the field of consumer power supplies and has spread to the field of TWS Bluetooth headsets. The strong market demand for TWS headsets has also exacerbated the shortage of main control chips and related touch chips. .

A few days ago, Huang Chongren, chairman of chip foundry RSMC, said that the current wafer production capacity is unbelievably tight, and customer demand for production capacity has reached a panic level. It is estimated that from the second half of next year to the second half of 2022, the logic and DRAM markets will be short. The goods are unimaginable.

Huang Chongren’s words are not alarmist. According to the “Electronic Engineering Album” sister media “International electronic Business” reported that the global wafer foundry capacity is in short supply, including TSMC, UMC, World Advanced, NSMC and other foundries in the fourth quarter. Full orders. In mid-October this year, Gu Wenjun, the chief analyst of Xinmou Research, also posted on Weibo to disclose that the boss of a chip design company kneeled down to the executives of the foundry in order to obtain production capacity.

Wafer foundry capacity is in short supply, and some foundries are also raising prices according to supply and demand. On November 26, when SMIC responded to investors’ questions about whether to raise the price of 8-inch wafer foundry, it said that existing customer orders will be carried out according to the signed contract, and new customers and new projects will be negotiated by both parties to determine the price. The company will also increase average wafer prices by optimizing its product mix.

Some analysts believe that under the background of wafer expansion equipment first, the global wafer foundry capacity expansion will be highly certain next year. According to SEMI data, wafer capacity expansion will continue in the next four years, with monthly wafer capacity increasing by 35% by 2024.

During the 2020 ICCAD conference, the reporters of “Electronic Engineering Special” and “International Electronic Business” interviewed Dr. Chen Ping, Deputy General Manager of TSMC (China), and Vice President of Sales of Hejian Chip Manufacturing (Suzhou) Company, a subsidiary of UMC (UMC). Manager Lin Weisheng learned the truth behind this big shortage and the views of the two Foundry leaders on the market and process trends in the next two years.

　　TSMC: More and more customers choose advanced technology, and out of stock is a superposition of three factors

Dr. Chen Ping, Deputy General Manager of TSMC (China)

This year, under the dual pressure of the new crown pneumonia epidemic and Sino-US trade friction, the global economy is facing challenges, but the semiconductor industry is extremely hot, especially the foundry. Taking TSMC as an example, revenue in the first nine months of 2020 increased by 31% compared to the same period last year, and this phenomenon continued in the fourth quarter, and it is expected to achieve a growth of more than 30% for the whole year.

The semiconductor industry has not grown at such a rate for many years. The last time was ten years ago, when it was just recovering from the financial crisis. But for this level of growth, TSMC is prepared. “When our company planned this year last year, we did have expectations.” Chen Ping said.

The current global demand for semiconductors has greatly increased. Taking smartphones as an example, although it seems that the total shipments have not changed significantly, the number of chips used in each mobile phone has increased a lot. TSMC has quantified production capacity expectations based on these technical information, but it is still unable to fully meet the current hot market demand. In terms of advanced technology, TSMC is also making good progress. Not only has 5nm been successfully mass-produced, but also more new customers have been added due to 5nm than when 7nm first entered mass production, and 3nm will be even more. It can be seen that everyone is right The desire for advanced technology is still increasing year by year.

Chen Ping believes that the serious shortage since the second half of 2020 is caused by the superposition of three factors.

　first factor, Even if there are no emergencies such as the new crown and embargo, the demand for semiconductors this year is also very strong. Although the pulling effect of mobile computing has weakened since 2016, in recent years, with the development of 5G, AI and IoT, the market demand for chips is rapidly increasing, and an era of Ubiquitous Computing is coming.

　　second factorIn the first half of the year, due to the logistics blockage in many areas due to the epidemic, OEMs could not stock up normally in the first half of the year. In addition, various types of telecommuting, education, and data center expansion caused a sharp increase in the demand for various terminal markets. Therefore, in the second half of the year, the market demand is in the crystal The link of the round foundry has been enlarged, and the shortage of stock has further created market panic, making everyone aggressively stock up, and build inventory with a plan of 1.5 times or even 2 times the normal inventory days to seek supply security.

　　third factor, is caused by geopolitics and the movement of the industrial chain caused by it. For digital chip manufacturers, since most of them are produced in wafer foundries, even if the supply chain shifts, the global total capacity demand will not change much. However, it has a greater impact on analog manufacturers, because many traditional analog IDM manufacturers are in the United States. In the past, most OEMs did not take the risk of changing suppliers because of the variety of analog devices and the low unit price. But this time, due to geopolitical reasons, many Chinese OEMs choose to switch to fabless in Asia, and fabless uses foundry production, which has a greater impact on the capacity demand of foundries.

Chen Ping said: “The superposition of three things makes the production capacity very short. As for how long the water will be squeezed out? Where will the water level be after the squeeze? After the water is lost, the demand is still strong, because this water level is superimposed on the already high demand, so the elimination time will be longer.

TSMC has been classifying based on product type. “For example, a few years ago, if you wanted to estimate when IoT chips would come up, you might not be able to estimate it because you didn’t know how and where? But this year’s market shows us some of the past. The chips that are expected to come up have actually come up.” Chen Ping mentioned that the distribution of order products this year is different from before, the amount of smartphone chips has not decreased, but the proportion has declined, because orders for other types of chips have increased. This also confirms the anticipation of the imminent entry into the era of pervasive computing.

In 2020, the U.S. sanctions against Huawei made everyone wonder how difficult it is to build a production line that does not contain U.S. technology? How hard is it?

Chen Ping used to be a process engineer and has been doing process research and development in the top laboratories in the United States for many years. He believes that semiconductor technology is a science that emphasizes experiments very much. “A scientist may not understand all the scientific principles in his life, and many people need to work together to make products, do experiments, and analyze data.” Process engineers have a common Experience, that is, if you choose the right equipment, you are close to success; if you choose the wrong equipment, you will be very hard. Therefore, the selection of production equipment is an important part of process development. Since the equipment is developed and produced by equipment manufacturers based on the world’s top technology, many of which are indeed from the United States, it is quite challenging to build a high-quality production line that does not contain American technology at all.

Semiconductor technology relies on the cultivation of talents. Chen Ping expressed his disagreement with the statement that domestic universities have not cultivated enough semiconductor talents. Taking his personal experience as an example, he studied electronics at a domestic university as an undergraduate, radio frequency as a master’s degree, and entered semiconductor-related majors when he went to the United States to study for a doctorate. “Semiconductor is a comprehensive discipline. In addition to microelectronics majors, students in chemical engineering, materials, physics, and mechanics trained by domestic universities can become semiconductor talents. Even if you do chip design, you don’t have to study in university. Design, as long as you have good basic literacy and are willing to learn, you can quickly become a professional talent.”

　Hejian chips: To solve the problem of production capacity, it is necessary to look at 8 inches and 12 inches

Lin Weisheng, Deputy General Manager of Sales of Hejian Chip Manufacturing (Suzhou) Company

Founded in 1980, UMC is the first integrated circuit company in Taiwan, China and transformed into a foundry service in 1995. This year marks the 40th anniversary of UMC. They announced a major business decision in 2017, which is to abandon investment in advanced processes below 12 nanometers and focus on special processes. It is reported that UMC will continue to expand the production capacity of 28 and 22 nanometers this year and next year. As UMC’s subsidiaries, Lianxin and Hejian chips will largely undertake the task of capacity expansion.

Speaking of this year’s shortage of goods, Lin Weisheng believes that the main reason is the security of the first supply chain and the technical blockade in the United States in the past two years. Therefore, in order to ensure that chips will be available for a long time in the future, domestic system manufacturers will stock up in the second half of this year. Supply chain security comes first and takes a bolder approach when manipulating inventory.

The second is the impact of the new crown pneumonia. The entire processing chain in Southeast Asia and India has become unstable, while the processing chain in mainland China is the most robust, and overseas processing orders are also returning this year. The demand for this piece is huge, but the incoming orders put pressure on the foundry process. Everyone is actively stocking up, and the expansion of production capacity will not keep up for a while.

The third point is the terminal application driver, the most obvious being the various application devices brought up by 5G. Due to the obstruction of Huawei’s high-end chip manufacturing, other domestic mobile phone manufacturers believe that they can replace them and gain market leadership, so they are also generous in ordering and stocking.

Judging from the current orders placed by customers, Lin Weisheng predicts that the demand will continue into next year, and the first half of next year is still relatively tense. Different process nodes have different requirements, such as 8-inch power management ICs and MCUs, especially MCU capacity shortages. “We also feel the pressure from system manufacturers.” The 12-inch situation is related to this year’s epidemic, everyone The time spent at home has become longer, and it is found that there are more devices that need to be updated, and the demand for smart homes, TVs, mobile phones, and tablet computers has all come up. This wave of replacements continues, especially for notebook computers, which are still growing. Overseas, the stocking for Christmas has been completed. The current stocking in the domestic market is mainly for the Spring Festival market, and the stocking is much stronger than in previous years.

How to expand production to solve immediate worries? Lin Weisheng believes that if the 8-inch fab has the opportunity, it is more suitable to buy the entire factory if it is divided into 8 inches and 12 inches. Because it is necessary to expand the production line in the existing 8-inch factory, firstly, it is difficult to obtain equipment, and secondly, the current 8-inch average selling price cannot reflect the return on investment of the new 8-inch factory; Productivity is the main factor.

In addition, the iteration of eight-inch products to 12 inches can also relieve the shortage of eight inches. Taking the development of power management ICs as an example, the development is divided into three grades: from low voltage to 30V, 30-100V and 100-700V. Corresponding to the size of the market, low voltage to 30V accounts for 60%, 30-100V is close to 22%, and 100-700V is close to 18%. There are also three grades on the process node, the first is 8 inches of 0.25 microns or 0.35 microns, which is also the most used, the second is 0.11 to 0.18 microns, and the third is 90 nanometers or 50 nanometers. In the iteration of the driving process, it is the area occupied by the digital part of the chip. If it is less than 30%, 0.25-0.35 microns is enough, 30-60% is 0.11-0.18 microns, and 60% needs 12 inches. Most of the power management chips in China are made of 0.25-0.35 micron process, and some have reached 0.11-0.18 micron, and this part is 8 inches, while overseas European and American companies are already developing 12-inch 55-nanometer BCD process to make high-end products. Power digital chip.