Q1 2019 Unit Drop Impacts Wafer Demand For 2019

Which segments have seen the largest declines, and when will wafer demand get back on track?

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The Semico Wafer Demand Model update for Q1 2019 now results in a 5.9% decline in wafer demand for 2019. Along with process technology and productivity, Semico’s Wafer Demand Model is highly dependent on semiconductor unit sales. In the Q1 2019, total semiconductor units dropped by 7.4% compared to Q4 2018 and 3.8% compared to Q1 2018. The drop in units is significant because of the broad spectrum of products that were impacted.

The only good news in terms of units is that Optoelectronics and Sensors continued to grow on a year over year basis. Other than that, all products suffered a decline in Q1 2019 based on a quarterly year over year and a sequential quarter over quarter comparison.

The drop in units contributed to a reduction in wafer demand for all major product categories, except for Optoelectronics and Sensors. Wafer demand for Optoelectronics and Sensors will grow but by only 1.8% in 2019. This is the smallest growth for this category in over eight years.

Memory products will experience the largest decline in wafer demand with an 8.5% decline. MOS Logic requires the largest amount of silicon wafers and will log a 7.1% decrease in wafer demand. Even Discrete products will register a decrease of 3.7% in 2019.

Last year both 200mm and 300mm wafers were in short supply, and wafer prices have been increasing over the past two years. Although no one wants their market to experience a unit contraction, the silver lining is that this has provided some relief when it comes to getting enough silicon for production and may provide a temporary reprieve to the increasing wafer prices.

Wafer demand will be back on track in the second half of 2019 and into 2020 as new products and process technologies begin to ramp. Wafer demand is expected to increase at an above-average rate of 11.7% in 2020.

For the full wafer demand forecast, contact Rick Vogelei at rickv@semico.com and ask for the Semico Wafer Demand Update Q1 2019 or the Semico IPI April 2019 issue.



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