Which wafers are in surplus?<\/p>\n\n\n\n
Nikkei News reports that the oversupply of memory chips for cell phones has been particularly pronounced due to the decline in demand for smartphones. For example, Micron Chief Executive Officer Roland Berger said at an earnings conference last month that the industry is experiencing the worst supply-demand imbalance for DRAM and NAND memory chips in 13 years, and an analyst survey showed that revenue fell 471 TP3T from September to November last year. Micron's revenue fell 47% from September to November last year, and an analyst survey showed that the wafer oversupply isn't expected to ease until the fourth quarter for smartphones, while for personal computers (PCs) the oversupply will peak in the third quarter and then gradually ease.<\/p>\n\n\n\n
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Analysts believe the oversupply of data center semiconductors may continue into the first quarter of this year, as U.S. and Chinese tech giants hold off on investing due to weak advertising revenue, which in turn affects demand for data center chips. Nikkei News presents the results of a survey of analysts from 10 sources, including research and trading firms, in which respondents were asked to rate the degree of oversupply and undersupply on a five-point scale.<\/p>\n\n\n\n
Memory makers Micron and Japan CAYIN are focusing on correcting inventories, and they have been drastically reducing production since October of last year, but these measures have not been able to cope with the downturn in demand. Inventories of memory and other semiconductors in the supply chain have ballooned. A survey conducted by the Japan Semiconductor Manufacturers Association in December last year showed that the rate of those reporting excess supply was 64 percentage points higher than the rate of those reporting shortages, an increase of 38 percentage points over the results of the September survey. Inventories at companies using semiconductor products also remain high.<\/p>\n\n\n\n
How do the industries see wafer demand in 2023?<\/p>\n\n\n\n
TSMC's chief executive, Richard Wei, said at an earnings conference in October last year that it expects to rebalance inventories to healthier levels only in the first half of 2023, and that the company is still facing a shortage of semiconductors in the automotive industry. By contrast, the automotive industry is still facing a semiconductor shortage, although lead times for some automotive chips have been shortened. In addition to a renewed increase in production by the automotive industry, an increase in the number of wafers required per vehicle is also contributing to the higher demand for wafers across the industry. An electric car requires an estimated $1,600 worth of semiconductors, more than the $500 needed for a gasoline-powered vehicle. Despite the increase in demand for automotive wafers, analysts expect power semiconductors for current control and analog semiconductors for power supply management to remain in tight supply throughout 2023.<\/p>\n\n\n\n
Supply of these parts is unlikely to increase rapidly as capital investment remains low, said Japanese trading company Macnica Holdings. Estimated lead times for power semiconductors have lengthened from 31 to 51 weeks at the end of May last year to 39 to 64 weeks at the end of November last year, according to U.S. wafer supplier Sourcengine.<\/p>\n\n\n\n
Toyota Motor Corp. and Honda Motor Corp. are adjusting operations at some of their Japanese plants this month after they fell short of production plans last December due to a shortage of chips. Some major carmakers said they don't expect parts supplies to return to normal levels until 2024, and if the slowdown in global economic growth worsens, it will take longer to clear inventories, putting the wafer market at risk of stronger headwinds.<\/p>\n\n\n\n
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