The upstream price rise is linked with the epidemic situation, and the price rise of IC sealed test will not stop

Date：2021-05-21 16:39:00 Views：4018

In the second quarter, the tide of "core shortage" did not subside. Under the soaring demand, prices are rising in all links of the IC industry chain. In terms of chip sealing and testing, major manufacturers such as rimoonlight have raised their quotations in the first quarter of this year, but with the rising prices of raw materials such as copper and the "closure" of Malaysia due to the epidemic, the price rise of the sealing and testing industry will obviously continue. For electronic manufacturers and IC vendors, only be prepared to deal with the market in the next stage.

Copper prices rose, directly raising the sealed test quotation

Copper and other non-ferrous metals are one of the most important industrial raw materials, which is no exception in the chip packaging and testing industry. Taking the most common wire packaging in the industry as an example, copper wire is one of the most commonly used wires. Compared with gold wire, gold alloy wire and other wires, copper wire has lower cost, and the performance index is sufficient for most chips. However, the rising copper price has pushed up the cost of the packaging industry.

[Shanghai copper market] Source: financial investment market]

As can be seen from the K-line chart, Shanghai copper futures started from the second quarter of last year, has maintained a unilateral upward trend, and set a new high last month. This shows that the market copper price has been rising since the epidemic subsided slightly in the middle of last year. In this round of unilateral rise, there are traces of the rising costs of various manufacturing industries.

In the case of IC industry, the rise of copper price in the second half of last year was transmitted to the downstream copper foil substrate (CCL), which raised the price of PCB. Of course, the rise of copper price will also affect the IC carrier board, packaging grounding and other basic materials required for chip packaging and testing, which has laid a foundation for the price rise of packaging and testing.

From the statement of the sealing and testing factory, when announcing the Q1 financial report before, rimoonlight said that all the price increases from wire packaging to cladding packaging this year, but the current price adjustment is actually "very friendly", because the price increase "increases the cost of pure reaction materials". Chaofeng, another Taiwan packaging and testing factory, also pointed out that it will successively negotiate quotations with customers from March to May to reflect the sharp rise in raw material prices.

As for this wave of copper prices and when the price rise of various raw materials will stop, this problem has exceeded the IC industry, which needs to be considered from two aspects: the global financial environment and the supply and demand of bulk commodities. It can only be said that if the price rise of raw materials continues, the price rise logic of the sealed test and even the whole IC industry chain still exists.

The demand is too high, which leads to the extension of order delivery time

Another dimension to look at this wave of sealed test price increase is that the excess demand leads to the full order of manufacturers and even the extension of delivery time. With the peak season in the second half of the year, the gap between supply and demand will be further widened. At that time, it will become another driver of sealed test price rise in addition to upstream factors.

From the situation of the mainland sealed and tested factories, Changdian technology, Huatian technology, Tongfu micro power and Jingfang technology achieved good results in the whole year of last year and the first quarter of this year. The revenue and profits of these manufacturers have increased significantly year-on-year, and the orders are full, which is obviously due to the strong market demand. Based on this, the mainland sealing and testing plants have started fixed increase projects to raise funds to expand production capacity to meet more needs in the future.

As for Taiwan's sealing and testing plants, the first quarter results of rimoonlight holdings, SiGe, Huatai, Nanmao, Chaofeng and other plants were also good, reflecting strong market demand. According to the situation of the leading rimoonlight holdings, the revenue increased by 20% year-on-year in the first quarter of this year, and the net profit doubled directly. It is the sealing and testing manufacturer with the most profits in this round of chip market.

Due to the strong market demand, the delivery date of rimoonlight wire packaging has been extended to 40-52 weeks, equivalent to nearly one year. At the same time, sun and moonlight are also purchasing equipment and stepping up production expansion. However, at present, the delivery period of wire packaging equipment has also been extended to 10 to 13 months, so the expansion of production is not a day's work. During this most scarce period, in order to occupy the capacity, downstream IC manufacturers can only pay in advance to lock the capacity and accept a certain degree of price increase.

Malaysian epidemic outbreak, short-term test of sealing and testing industry

In addition to long-term factors such as supply and demand and upstream, the rapid warming of the epidemic in Malaysia in the short term is also testing the sealing and testing industry. Since early April, the number of confirmed cases in a single day in Malaysia has rapidly jumped from more than 1000 to 5000 in early May. This grim situation has forced the government to take "closure" measures to prohibit people from cross state and county activities from May 12 to June 7.

Malaysia is one of the major producers of chip packaging and testing in the world. According to statistics, the production capacity accounts for 13% of the world, including riyueyue in Taiwan, Tongfu micro power and Huatian technology in the mainland. With regard to the impact of the "closure of the country", due to the high level of automation in the closure and testing industry, the focus is not on production, but on the transportation of raw materials and finished products.

It can be predicted that the measures to restrict the movement of people will reduce the efficiency of Malaysia's raw material entry and product export, but the specific impact is uncertain. As long as the Malaysian epidemic does not develop to the point where the testing plant needs to be shut down, the deterioration of global chip supply is limited.

However, it should also be noted that the situation of the packaging and testing industry is not fully applicable to other fields. Malaysia also has the capacity of many IC devices and passive components. These industries may be more affected due to more application manpower. On the whole, the impact of the Malaysian epidemic on all links of the IC industry chain is different, but on the whole, it will weaken the supply level of global chips.

Conclusion: multi factor linkage makes it difficult to stop the price rise of closed beta

According to the current industrial situation, the price rise in the upstream and the relationship between supply and demand determine that the closed test will rise, and the epidemic situation will exacerbate the market in the short term. According to the predictions of major electronic enterprises and research institutions, the chip shortage will last until next year at least, and even the structural supply-demand gap will last for several years.

In short, the most tense time in the IC industry has not passed, and it is too early to talk about the market reversal, which is an industrial opportunity for chip factories, OEM factories and packaging and testing factories, but major electronic manufacturers and traders need to be fully prepared to guard against the acceleration of the market.