Wafer foundry processes are becoming mature and costs are coming down

Foundry mature process capacity loosening, the tide of price cuts come. Taiwan IC design manufacturers confirmed that there has been a mainland foundry to open the first shot, the recent price reduction of more than 10%, Taiwan foundry in order to prevent the loss of orders, began to offer a "discount price" in some specific process, a discount of about single-digit percentage, which is equivalent to a disguised price reduction.

Mainland wafer foundry mature process indicators are SMIC, Hua Hong, crystal, and ship; Taiwan to UMC, the world, the force of the accumulation of the main. As prices begin to fall, the related manufacturers are affected by subsequent operations.

UMC will hold a legal conference this Wednesday (27th), and is currently in a period of silence before the conference, not commenting on market rumors, especially price dynamics, stressing that the outlook will be released in the legal conference. The world will hold a legal conference on August 2, also in a period of silence. LSC pointed out that the company is continuing to adjust its product portfolio and has no plans to reduce prices.

Previously, TSMC has been clearly pointed out in the legal conference, has seen the supply chain to take action to reduce inventory levels, customer inventory adjustments are expected to continue for several quarters, may not end until the first half of next year, when the market is widely believed that consumer electronics buying by the epidemic and inflationary pressures and a serious downturn, the foundry mature process may not escape the fate of the price decline.

The unnamed IC design manufacturer revealed that many of its chips produced in mainland foundries, chip prices have been reduced by more than 10%, is expected to reduce the cost of related chips from the fourth quarter.

Another IC design maker did not shy away from the industry news quickly, the mainland foundry price reduction, Taiwan factory also has action in response, part of the process to give a single-digit percentage "discount space", thereby reducing the risk of orders flowing to land-based factories, this move is equivalent to "disguised price reduction ", but these are buyers and sellers "private Joe good agreement", "will not bang the drum to tell others", because other customers may misunderstand if they hear the message is a full price reduction, leading to a big cut, so no one wants to Admit.

IC design manufacturers also confessed to talk about price reductions, some foundries still adhere to the position, at most willing to loosen the mouth at this time to add pieces do not have to raise prices, or "to reduce prices can be negotiated", but the premise is to have the volume. But the problem lies in the current situation, the control of inventory for the important, few people are willing to add orders.

IC design manufacturers are now facing the challenge of weak downstream demand, the client will have to reduce prices, but if the upstream foundry can not reduce the price of the community's difficulties, will face the choice not to reduce prices may damage the relationship, or have to sacrifice their own profits to maintain customer relations.

When it comes to IC quotation, industry sources said that the large size and medium size panel driver IC price is about a small reduction compared to the end of last year, as for the small size panel driver IC quotation, it has been reduced by more than 20% compared to the end of last year. Touch and drive integration IC (TDDI), it is understood that the price of some items have been reduced by double-digit percentage, part of the reduction is still within 10%, including the FHD TDDI chip drop is greater.