Pure-play foundries United Microelectronics (UMC) and Powerchip Semiconductor Manufacturing (PSMC) will initiate further price hikes of about 10-20% with the new pricing to be effective starting April, according to industry sources.
The prices will increase mainly for new orders and short lead-time ones, the sources indicated.
Fabless chipmakers have moved to pass increased costs onto downstream clients, generating handsome profits due to upward adjustments in their chip ASPs. But foundries have seen weaker profit momentum compared to their fabless clients, the sources noted.
Pure-play foundries have just raised their quotes to fair and reasonable levels, PSMC chairman Frank Huang has said previously. PSMC raised its foundry quotes by 30-40% in 2020, when the pure-play foundry generated NT$1.23 (US$0.04) in EPS.
PSMC's 2020 EPS is far lower than fabless chipmakers such as Novatek Microelectronics, whose EPS hit a record high of NT$19.42.
Raising foundry quotes is a must for pure-play foundries so they can spend more on building additional fabrication lines, said Huang, adding that most foundries run fabs requiring huge spending without much profit, Huang said. PSMC is constructing a new 12-inch wafer plant capable of turning out chips made on the 1x- to 50nm processes.
Market observers are generally upbeat about 12- and 8-inch foundry price outlook for not only 2021 but also next year. TSMC, UMC, PSMC and 8-inch foundry Vanguard International Semiconductor (VIS) are poised to see their capacity fall short of customer orders until at least the end of this year.
Article translated by Jessie Shen
