Will the world add two more wafer factories, causing concerns about chip oversupply?

Recently, Intel, a major chip manufacturer, announced plans to build two new cutting-edge chip factories in Lijin County, Ohio, with an initial investment of more than 20 billion dollars, which will be part of Intel's IDM 2.0 strategy.

It is reported that in order to attract Intel to build a chip factory in the local area, Ohio, the United States, provided the company with incentives totaling about $2 billion.

Intel previously planned to invest up to $100 billion to build eight wafer factories in Ohio, which will be the largest single private sector investment in the history of Ohio. Intel CEO Pat Kissinger said that the local area would become the heart of the chip and might be "the largest chip manufacturing base on the earth".

The two new factories are an important step in the construction of eight factories. According to the statement of Intel CEO Pat Kissinger quoted by foreign media, the new factory will manufacture the most advanced processor chips.

The project is expected to create 3000 jobs, and its construction process will provide more than 7000 construction jobs. In addition, in order to support the development of new sites, Intel has committed an additional $100 million to establish partnerships with educational institutions to establish talent channels and strengthen research programs in the region.

In addition to Intel, TSMC, the global leader of wafer foundry, also announced in December last year that it would increase its planned investment of US $12 billion to US $40 billion, build two factories in Phoenix, and plan to put into operation and produce 4nm and 3nm chips in 2024 and 2026 respectively.

Big manufacturers are ramping up production, and the global chip supply is surplus?

The scramble of global chip manufacturers to increase chip production inevitably caused the industry's concern about the global chip supply surplus.

Zhang Molan, deputy director of the US-European Research Department of the China Center for International Economic Exchanges, said earlier that in the past two years, chip manufacturers have expanded their production crazily. But now the global economic growth is slowing down and demand is weakening, so there is a structural oversupply phenomenon.

As for the changes in the future market supply and demand, TrendForce Jibang Consulting, a market research institute, believes that due to the changing international situation, wafer fabs will move towards regionalization.

According to the latest research of Jibang Consulting, the medium and long-term supply and demand status of wafer foundry will gradually tend to diversified capacity layout in each region. In recent years, there will be more than 20 new wafer factories planned in the world, including 5 in Taiwan, 5 in the United States, 6 in Chinese Mainland, 4 in Europe, Japan, South Korea and Singapore.

Jibang Consulting believes that semiconductor resources have gradually become strategic materials. In addition to considering the business and cost structure, wafer foundries also have government subsidy policies to meet customers' local production needs, while maintaining a balance between supply and demand. Therefore, the diversification of future products and pricing strategies are the key to the operation of wafer foundries.