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

CTOnews.com February 17 news, The Elec reported that Samsung Electronics 12-inch wafer foundry average operating rate of about 70%, while the eastern high-tech (DB HiTek) 8-inch wafer foundry average operating rate will drop to 60-70%, some 8-inch wafer foundry operating rate dropped to 50%, in sharp contrast to the first half of last year close to full-load operation.

The industry attributed the decline in utilization to the decline in demand for IT in the context of the global recession. With the extension of the economic downturn, the demand for smartphones, personal computers and home appliances in the downstream industry continues to shrink, while the server market, which should be robust recently, has also weakened.

In addition, the capacity utilization of TSMC, the world's first-generation factory, has also declined. The industry estimates that TSMC's average wafer foundry utilization rate is 70-75%.

Foreign media believe that the impact of the decline in the utilization rate of contract manufacturing has a greater impact on 8-inch contract manufacturing enterprises such as DB HiTek, Key Foundry, SK Hynix IC, Magner Chip and so on. DB HiTek maintains an operating rate of 60-70 per cent, but in the case of some 8-inch contract factories, it has fallen to 50 per cent.

As utilization declines, profits are expected to be burdened. Coupled with the increase in the burden of fixed costs, some foundry companies have begun to cut prices. For example, CTOnews.com reported that UMC announced that it would cut prices by 10% from the second quarter of this year.

Foreign media said that some contract manufacturing companies in South Korea have also begun to cut prices one after another. An 8-inch wafer foundry industry official said, "We are currently offering price concessions to strategic customers, focusing on small and medium-sized wafer foundry enterprises."

However, industry insiders predict that the decline in generation capacity utilization will be temporary. This is because with the commercialization of autopilot, the Internet of things and artificial intelligence technology, the demand for semiconductors is steadily increasing, and the demand for semiconductor alternatives delayed by the recession is high.

"We expect demand and market conditions to recover in the second half of the year, mainly HPC, data centers and cars," Jeong Ki-bong, vice president of Samsung's contract manufacturing division, said on a conference call after the results were released in the fourth quarter of last year.

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