GlobalWafers’ 6–12 Inch Capacity Fully Utilized as Customer Long-Term Contracts Extend Further

Global silicon wafer manufacturer GlobalWafers (6488-TW) held its earnings briefing today (4th), where Chairman Hsu Hsiu-Lan shared her outlook. She stated that driven by continued growth in demand from AI, HPC, and advanced packaging, the company’s 6-inch, 8-inch, and 12-inch production capacities are currently nearly fully loaded. Supply of advanced and specialized specification wafers has become noticeably tight, and customers are increasingly seeking long-term agreements to secure future AI chip supplies. This trend is spreading to logic and specialty wafer products, with contract durations extending beyond previous norms.

Regarding the recent fire at its 8-inch wafer plant in Novara, Italy, GlobalWafers explained that the incident primarily affected the backend processes of the 8-inch line and did not impact the entire facility or the 12-inch production line. The company has initiated global capacity reallocation, utilizing cross-plant support and outsourcing to minimize supply disruptions to customers. Comprehensive damage assessment, recovery measures, and insurance claim procedures have also been launched. Meanwhile, initial certification progress for the new 12-inch production line is proceeding smoothly, with volume gradually ramping up according to customer demand.

Looking ahead, Chairman Hsu emphasized that AI is not merely a short-term infrastructure investment but is rapidly expanding its influence into edge computing, smart devices, generative AI, and physical AI—continuously driving semiconductor demand. As AI, high-performance computing, and advanced packaging evolve, market demand for high-purity, high-flatness, low-defect, and specialized wafers is simultaneously increasing, fueling growth in 12-inch silicon wafers, SOI wafers, and other high-value products.

Hsu noted that excluding newly added capacity, GlobalWafers’ production capacity across all wafer sizes and gallium nitride (GaN) is nearly fully utilized. Silicon carbide (SiC) capacity utilization is also rapidly increasing and is expected to reach full load in the second half of 2023. Market recovery is expanding from AI and advanced applications to broader wafer sizes and end markets.

On long-term contracts, GlobalWafers stated that while past agreements typically lasted around three years—with a maximum of five to eight years—the current AI-driven cycle sees customers placing greater emphasis not only on wafer specifications, quantities, and pricing but also on the geographic origin of supply, local production, and supply chain resilience. As a result, long-term contracting is evolving into a more extended and flexible partnership model.

Regarding pricing trends, Chairman Hsu acknowledged that the silicon wafer market faced pricing pressures over the past two years. However, supply-demand conditions have gradually improved recently. Coupled with ongoing increases in energy, logistics, raw material, and labor costs, the company is actively communicating these cost pressures to customers, seeking understanding and support.

GlobalWafers expects non-contract (spot) silicon wafer prices to continue rising through the second half of 2023 and into the first quarter of 2024. For long-term contract prices, execution will follow existing terms, although contracts containing price adjustment clauses may allow for further discussions.