IC Capacity Predicted to Reach Record Highs in 2021, but Many U.S. OCM Infrastructures Still Lag Behind
IC Insights, which is known for its research and analysis of the semiconductor industry, recently released some notable predictions for 2020 and beyond. Among them is the prediction that IC capacity across the manufacturing landscape will hit a record high of approximately 21 million wafers (200mm-equivalents) by 2021.
While this marks a positive reversal of the status quo from most of the 2000s that saw manufacturers reluctant to add capacity in the wake of unexpected shortages and general market unpredictability, it is important to note that most of this increase will be driven by component manufacturers in India, China, and other Far East markets. The U.S. market will continue to be limited by flat — or even decreasing — capital expenditure budgets. According to a recent manufacturing survey from ISM, investment is expected to drop by 2.1 percent and manufacturers are feeling little pressure to expand beyond current levels.
Such trends indicate that in order for U.S. manufacturers to continue to expand capacity, it needs to be done within current means, or at least in ways that do not contribute to a rising annual production budget. One such solution would be the use of third-party storage providers who have the ability to effectively lower annual carrying costs.
Third parties will also be expected to play a critical role in the banking of raw die and wafer as manufacturers look to leverage their IPs in a competitive market. Costly specialized equipment such as dry cabinets, despite being necessary for long-term die banking, remain out of reach for smaller component manufacturers, and third parties with die and wafer banking capabilities offer such outfits the option of expanding without committing to substantial investment in on-site infrastructure.
As the component shortages that have largely defined 2018 and parts of 2019 continue to fade into a period of perceived supply surplus, manufacturers will be pressed to find new ways to innovate. This includes innovation within the product itself, but also innovation within their own storage infrastructure. If a manufacturer is not poised to take advantage of a period of supply excess, then it is a waste of a prime opportunity for significant market growth.
Third-party solutions, such as the ones provided by Partstat, can help.