China-based logic IC foundries have already initiated a 10-20% price cut, as their fabless customers continue scaling back orders, according to industry sources.
Some Taiwan-based pure-play foundries are also said to be starting to lower their quotes for mature process manufacturing, according to the sources. Major Taiwan-based foundries remain firm on prices despite slowdown in demand for many mass-market device applications, the sources indicated.
Second- and third-tier pure-play foundries have experienced delays of order fulfillment, or even cancellations of the long-term contracts already struck with their fabless customers, the sources noted. With clients slowing down their pace of orders, the foundries are considering price drops to better compete for orders from IC design houses, the sources said.
Foundries have seen orders for large-size display driver ICs and other analog chips for consumer electronics, which require a considerable amount of wafer starts at foundries, fall rapidly amid weakening end-market demand, the sources indicated. The foundries, particularly 8-inch ones, are bracing for capacity utilization rate drops, the sources said.
At 12-inch fabs, utilization rates for mature process nodes including 55/65nm and 90nm have started to loosen, the sources disclosed. Utilization rates for 40nm, 28nm, 22/20nm and 16/14nm remain high despite cutbacks in orders from fabless chipmakers, as demand for non-consumer ICs is strong enough to quickly fill the capacity gap left, the sources said.
Article translated by Jessie Shen
