Silicon Wafers: Imminent Capacity Glut

It could last for up to three years. But why?

Back on February 24 last, we presented our outlook for Silicon Wafers in 2023. At that time, we anticipated a 5% YoY decline in silicon wafer area shipments for the current year. Now that all the major players have reported their Q1’23 earnings, we need to revise that forecast downwards to a 10% YoY decline.

Furthermore, while we previously felt that Long Term Agreements would spare the silicon wafer segment the worst effects of the current downturn, we now think that customer inventory levels are unsustainably high and we anticipate increasing levels of delivery cancellations and/or push outs.

While we remain highly confident about the long-term outlook, we now anticipate that the silicon wafer segment will be in an over capacity situation potentially through 2026.

What’s changed since February to cause such a significant revision to our prior forecast? Let’s dig in…