In 2021, the global semiconductor market will undergo drastic changes. Not only will IC designs increase prices, but the prices of upstream suppliers such as wafer fabs and packaging and testing plants will also continue to rise significantly, driving the mid- and downstream suppliers of the semiconductor industry chain to follow up.

Affected by factors such as the impact of the epidemic and the continued strong demand in the semiconductor market, in 2021, the global semiconductor market continued the price increase in 2020. In fact, in addition to foundries and packaging and testing plants, this wave of shortages has expanded to the field of components.

For example, Renesas Electronics sent a price increase notice to customers on November 30, 2020, stating that due to the increase in the cost of raw materials and packaging substrates, it plans to increase the prices of some analog and power products starting from January 1, 2021.

NXP also stated in a letter to its customers that the company "reluctantly" increased the prices of all products in order to address the unforeseen cost increase brought by suppliers.

STMicroelectronics also confirmed to the media the authenticity of the price increase letter circulating in the market: due to the substantial increase in the company's production costs, in order to ensure the stable supply of subsequent products and meet customer needs, it has decided to increase the price of all products from January 1, 2021. Price, but did not disclose the details of the price increase.

In mainland China, many companies have also issued notices of price increases in the last month of 2020.

Silan Microelectronics stated that on December 9th, the price of our SGT MOS products increased by 20% this month; on December 21st, Wuxi Xinjieneng issued a price increase notification letter showing that from January 1, 2021, the company Product prices will be adjusted to varying degrees according to specific product models; on December 31, China Resources Microelectronics issued a price adjustment notification letter stating that from January 1, 2021, the company’s product prices will be adjusted accordingly. As for the adjustment range, Depending on the specific variety.

In addition, manufacturers such as Diodes, Fuman Electronics, Silicon Power, Hang Shun, Nanjing Weimeng and other manufacturers also issued price increase notices.

NAND Flash controller prices increase by about 10%-20%

On January 4, 2021, domestic flash memory controller manufacturer Deyi Microelectronics announced that its embedded memory control chip will be increased by 50% from January 1 this year.

In addition, Phison has responded to the news that the outside world has raised the quotation of NAND Flash control chip products.

Phison stated that in order to cope with the increase in quotation costs such as foundry and packaging and testing, NAND Flash control IC prices will be increased in the fourth quarter of 2020. The price increase varies according to different products, with the highest price increase Up to 20%. It is reported that this is also the first price increase for Phison in the past eight years.

Limited by the full capacity of upstream foundries such as TSMC and UMC, and the shortage of downstream packaging and testing capacity, many NAND Flash controller manufacturers, including Phison and Silicon Motion, cannot respond to customer increase orders.

According to the Semiconductor Research Office, in addition to suspending quotations for new orders, these controller manufacturers are expected to increase the price of NAND Flash controllers by 15-20% in the first quarter of 2021.

ESMT Technology: Revenue growth of 27% in 2020 to a record high, DRAM contract price will increase from Q1

Storage IC design factory ESMT Technology's December 2020 revenue was 1.384 billion yuan (NTD, the same below), down 6.7% month-on-month and up 34.24% year-on-year; benefiting from the booming demand for niche memory, the fourth quarter revenue was 4.395 billion yuan Yuan, a month-on-month increase of 9.9% and a year-on-year increase of 42.8%, rewriting a single-season high; 2020 annual revenue is 15.268 billion yuan, an increase of 27.41% year-on-year, a record high.

EMST Technology said that since late September last year, the supply of foundry capacity has exceeded demand. The cost of foundry and packaging and testing has increased, and the price has been adjusted accordingly. The spot price of some niche DRAM products has increased, while the contract price has been adjusted. It will increase from the first quarter of this year. If production capacity continues to be tight, prices in the first and second quarters are expected to continue to rise.

In addition to niche DRAM, Jinghao Technology pointed out that recently, driven by applications such as Bluetooth headsets, the market for NOR Flash is also very good, and the price is viewed positively, and further price increases are expected.

New year and new weather, DRAM is expected to improve all the way in 2021, and NAND may be "unlucky"!

For the storage market, due to the shortage of semiconductor raw materials and foundry capacity, the storage industry is partially alleviated. For example, the price of packaging and main control chips has increased, coupled with the rebound of the global "epidemic", especially the overseas epidemic Deteriorating again, intensifying the uncertainty on the supply side, has stimulated the continued high demand for stocking in the DRAM market. On the other hand, the three major DRAM OEMs have been limited in supply and no large sources of supply have been released. The price of spot memory has continued to rise for more than a month, and the cumulative increase in the price of memory in some channels has even approached 30%.

As far as the current market conditions are concerned, the three major cloud computing giants are expected to restart procurement demand, and notebook shipments are also continuing to be strong, and the demand for 16Gb-based memory modules is continuously increasing. In addition, the sales of 5G mobile phones are also expected to drive the recovery of shipment growth in 2021. The demand for 8GB/12GB capacity of LPDDR on flagship phones such as Samsung, Xiaomi and OPPO will increase, and the demand for automobiles and the Internet of Things is also growing.

Generally speaking, in the first quarter of 2021, the global semiconductor market price increase has been basically determined, and some market segments in mainland China are also expected to seize the opportunity of this wave of price increase and further realize domestic substitution.