Sumco has reportedly cut its wafer shipments to Wuhan Xinxin Semiconductor Manufacturing (XMC), and given priority to Taiwan Semiconductor Manufacturing Company (TSMC), Intel and Micron Technology, according to industry sources.

A cutback in wafer shipments from Sumco has led to a more severe shortage of NOR flash memory, said the sources.

The supply of 12-inch wafers has been tight amid strong demand for ICs including memory chips. Specialty IC foundry Vanguard International Semiconductor (VIS) has said the shortage of 12-inch wafers could last through the end of 2017.

Specialty DRAM and NOR flash chipmaker Winbond Electronics indicated the company intends to strike long-term deals with its wafer suppliers. Mask ROM and NOR flash maker Macronix International noted the company is willing to pay to make sure sufficient wafer supply.

Shin-Etsu has reportedly advised its major chip clients including TSMC, United Microelectronics (UMC), Intel and Globalfoundries to sign three-year contracts to ensure sufficient supply from the wafer supplier.

Prices for polished wafers for use in the manufacture of DRAM, 3D NAND and other memory products are expected to rise over 20% sequentially in the third quarter of 2017, while prices for epitaxial (epi) wafers for logic IC manufacturing are set to increase 15-20% on quarter, according to industry sources.