Shulou(Shulou.com)11/24 Report--

According to DIGITIMES industry sources, many second-and third-line foundry manufacturers feel that Fabless customers are reducing orders, which will be a further drag on their fab capacity utilization in the fourth quarter of 2022.

The rapid slowdown in demand for personal computers, mobile phones, televisions and other consumer electronics terminals has prompted brand suppliers, distributors and IC design companies to sharply slow contract progress around the middle of the second quarter of 2022, according to sources.

Brand PC suppliers and their contract manufacturers are already in the middle of an inventory glut, which could take three to four quarters to fall to an appropriate level. At the same time, in the field of mobile phones and televisions, the decline in end-market demand has also led to inventory adjustment in the supply chain of the entire industry.

According to sources, many pure wafer foundry manufacturers still reported strong sales and profits in the first half of 2022, and their wafer production plans began to relax. Utilization rates of GE, SMIC and Huahong Semiconductor, as well as Taiwan, are expected to decline further in the fourth quarter as customers reduce or delay construction.

LSMC had previously disclosed violations of LTA (long-term contracts) by its drive IC customers who would rather make punitive payments than see their inventories increase further in the face of weak market demand. The foundry expects 5-10% of its capacity to be affected in the third quarter, and its fab capacity utilization will continue to face further downward pressure over the next two quarters.

VIS, another foundry, also reported a decline in fab capacity utilization in the third quarter. The 8-inch contract manufacturer said on a recent earnings call that VIS was working closely with customers and equipment suppliers to cope with fluctuations in end-market demand.

On the other hand, both TSMC and UMC expect their wafer plants to remain fully utilized in the third quarter.

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