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Chip profits slump, Samsung and SK Hynix plan to buy fewer silicon chips

Update time : 2023-01-21 17:45:29

On January 11, according to TheElec, South Korean chipmakers Samsung and SK Hynix are planning to purchase silicon wafers for chip production, but the number is less than originally planned.

Chipmakers discussed the issue with their respective wafer suppliers sometime in the fourth quarter, the sources said. Silicon wafers are cut from crystalline silicon. Chips used in electronics are cut from these wafers.
There are five major suppliers of these wafers, including Shin-Etsu and Sumco in Japan, GlobalWafers in Taiwan, Siltronic in Germany and SK Siltron in South Korea. During the two years of the worst epidemic, the supply of these wafers was tight and chipmakers were in short supply. This situation continued when the global recession began in 2022. This is because silicon wafers are a back-end industry, and the impact of the consumer market comes later than the front-end industry. The front-end industry sells products directly to customers and is more directly affected.
It is understood that in the third quarter of last year, when chipmakers first reported a decline in profits, wafer companies saw an increase in profits.
Chipmakers are looking to reduce the number of wafers purchased more than usual. Wafer supply deals are usually long-term, which usually limits chipmakers from adjusting the number of purchases, but Samsung and SK Hynix have asked for further reductions, the sources said.

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