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

CTOnews.com February 13 news, prior to South Korean media reports that in response to the semiconductor market downturn, Samsung wafer foundry business plans to adopt "attack high-end, abandon maturity" strategy, the mature process production line personnel to the high-end production line to sprint 3nm production, and even do not hesitate to give up the mature process under the major customers, but Samsung subsequently issued a statement denied (see CTOnews.com previous report for details).

In this case, the industry again spread that Samsung not only did not give up the mature process business, but also offered a stronger price war to grab orders, hoping to reverse the decline and get more orders to fill production capacity.

According to Taiwan's Economic Daily, Samsung has now launched a price war with other manufacturers. The price offered by contract manufacturers for mature processes has dropped by as much as 10%, and has successfully won some orders from Taiwan Netcom chip factories. After Samsung started a price war, United Power, the world's advanced and other manufacturers also began to have the conditions to propose price reductions to customers.

According to the latest survey by TrendForce, a technology market research agency, Samsung wafer foundry still has a global market share of 15.5% as of last year, ranking second in the world. Although it lags far behind TSMC (market share 56.1%), it is close to the three companies, United Power, GE Core and SMIC, which ranked third to fifth.

The supply chain believes that Samsung wafer foundry used to produce its own chips, but the current environment is in the headwind, Samsung's own chip demand has been simultaneously frustrated, so there is a large number of idle capacity. In order to fill the gap in production capacity, it is inevitable to haggle for orders.

The supply chain points out that Samsung's wafer foundry price is already slightly lower than that of its peers, but if it is cut by another 10%, it is bound to become a means for those customers to force their former partners to cut prices. To put it simply, "if you don't reduce the price, I will go to Samsung to produce it", which makes the wafer foundry industry face common pressure.

In response, UMC responded that the visibility of orders at this stage is low, and this quarter is full of multiple challenges. Capacity utilization will drop to nearly 70% from 90% in the last quarter, and gross profit margin will drop sharply in step with wafer shipments. Gross profit margin may fall to the lowest level in nearly seven quarters, but demand is expected to pick up gradually in the second half of the year.

Expanded Reading: Samsung responds to sacrificing mature process orders for 3nm: it is not in line with the facts and will continue to expand mature process applications.

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