Is the quotation for wafer foundry fully relaxed? Liandian intends to reduce prices by 10% to encourage orders, while TSMC and Samsung are also eager to "retain customers"


Release time:

2023-02-16

The semiconductor wafer foundry price war is intensifying. According to Taiwan’s Electronic Times report today, it has recently been reported that under the pressure of cutting orders, wafer foundries have to accept the price reduction requirements of IC design customers, and the foundry quotations that have been rising for two consecutive years have been fully loosened.

Is the quotation for wafer foundry fully relaxed? Liandian intends to reduce prices by 10% to encourage orders, while TSMC and Samsung are also eager to

The semiconductor wafer foundry price war is intensifying. According to Taiwan’s Electronic Times report today, it has recently been reported that under the pressure of cutting orders, wafer foundries have to accept the price reduction requirements of IC design customers, and the foundry quotations that have been rising for two consecutive years have been fully loosened.

Some wafer foundry manufacturers have confirmed that the capacity utilization rate has dropped sharply due to customers cutting orders recently, but the corresponding pricing strategies are also quite different.

Among them, Samsung, PSMC, and GF have directly reduced their prices. Recently, it was reported that Samsung has launched a price war for wafer foundries to grab orders and targeted customers with mature 7/6nm processes. In recent months, it has continuously proposed preferential terms to Qualcomm, with a price cut of about 10%. Many other second- and third-tier fabs also chose to cut prices directly.

Although the nominal foundry prices of TSMC, UMC, and World Advanced have not changed, privately, different forms of discounts are given according to different customers and order sizes. 10%-15% price discount, the world's advanced way of adding free wafers to benefit customers.

At present, some first-line logic IC and memory IC packaging and testing manufacturers are gradually starting or extending the "vacation without layoffs". Factory capacity utilization has declined. Many fabs have sounded the alarm——

TrendForce even stated that the global political and economic trend is still the biggest variable, and the recovery rate of capacity utilization may not be as fast as expected. It is estimated that the output value of wafer foundry will decrease by about 4% annually in 2023, and the decline will be even worse in 2019 . TrendForce said that in the first quarter of 2023, the demand for wafer foundries will continue to decrease from mature to advanced, and the cut orders of major IC design factories will spread from the first quarter to the second quarter. The capacity utilization rate of foundries in the first to second quarters was not satisfactory, and some manufacturing processes in the second quarter were even lower than in the first quarter, and there was no obvious sign of order return.

However, as the impact of order cuts and price reductions gradually fades away, the semiconductor industry chain in the destocking cycle is not out of sight. Although the demand for computers and mobile phones recovers slowly, the demand for TVs has rebounded, and the demand for cars and servers Steady and small increase.

Some people in the industry are optimistic that some IC design companies have destocked in advance in the second half of last year. It is expected that the inventory days will gradually return to normal in the first half of the year. Factors such as IDM plant terminal application upgrades have led to an increase in outsourcing orders. The overall situation is beginning to favor TSMC and other foundries. In the first half of the year, the operation returned to the growth track.

This article is from the Financial Association,