Sumco expects its additional new capacity to come online in 2019 at the earliest, according to the Japan-based silicon wafer vendor, adding that it will enhance and optimize its existing production lines at a gradual pace.

Sumco does not rule out securing long-term supply contracts from specific chip companies, the company said.

Sumco and fellow company Shin-Etsu are reportedly seeking to sign long-term contracts with their chip customers, such as Taiwan Semiconductor Manufacturing Company (TSMC) and Intel. The supply of semiconductor-grade silicon wafers has been tight amid strong demand for ICs including memory chips.

The supply of semiconductor-grade silicon wafers will likely remain tight for another two years, according to industry sources. The sources also anticipated wafer prices, which have risen since 2017, will see larger increases in the second half of the year.

Prices for polished wafers for use in the manufacture of DRAM, 3D NAND and other memory products are set 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 the sources.