Digitimes said that prices for 12-inch wafers have fallen and are continuing to do so.

Silicon wafer demand started showing signs of a slowdown in the second half of 2018, said the sources, adding that sluggish demand for memory chips and contraction of orders placed by foundry chipmakers have led to excess inventory in the supply chain.

With the memory chip market continuing to weaken, demand for silicon wafers, particularly 12-inch ones, has been dragged down further. Prices for 12-inch silicon wafers are likely to fall back, Digitimes said.

Silicon wafer companies particularly those whose depend less on long-term supply contracts are being impacted negatively by near-term headwinds facing the memory and logic foundry sectors.

The one company not suffering too badly is GlobalWafers which is seeing its eight and 12-inch wafer manufacturing lines flat out.

Of the total 12- and 8-inch wafer orders obtained by the silicon wafer firm, as high as 80-90 percent  are based on long-term contract agreements, Hsu indicated.