The mature process of wafer foundry has a "frozen rise" signal

It is reported in the semiconductor industry that the wafer foundry mature process indicators have recently notified IC design customers that they will not increase the mature process foundry prices in the short term, ending the six consecutive quarterly upward trend of quotations since the end of 2020. With the "freezing up" signal of quotations, the "longest bull market in history" in the mature process of wafer foundry may come to an end.

At present, among the major wafer foundries in Taiwan, UMC, World Advanced, and NSMC are all based on mature processes, and their performance and quotation trends are closely linked. The main driving force of TSMC's revenue profit and product average unit price (ASP) growth comes from the leadership of advanced processes, while mature processes are mostly used for advanced process supporting services or turned into special applications, so they are not affected by the fluctuation of mature process foundry prices.

The mature process of wafer foundry has previously benefited from the surge in demand for panel driver ICs, power management chips, microcontrollers (MCU), automotive chips, etc., and the prices of UMC, World Advanced, and PSMC have continued to rise, even unprecedented. It is rumored that IC design houses are willing to use "bidding" to increase prices to wafer fabs for production capacity, which has led to a wave of " six consecutive quarters of price hikes " in the history of the longest bull market.

According to industry analysis, the quotations of mature wafer foundry processes are expected to rise, which should be related to the weakening market demand for large-size panel driver ICs (DDI), driver and touch integrated chips (TDDI), and power management ICs for non-Apple mobile phones, resulting in inventory The upside remains to be detoxified. However, the fact that wafer foundries no longer increase prices does not mean that production capacity is loose, especially 28/40/55/65/90 nanometers or even 0.13 microns, 0.18 microns, etc. related to automobiles are still very tight.

In response to rumors that the quotations of mature wafer foundry processes have frozen, UMC responded that it maintained its view that the company's average unit price of products in 2022 would increase by 14% to 16%.

TSMC has never commented on price issues, and the world's advanced investment in TSMC also does not comment on price issues. The data shows that TSMC's revenue in the fourth quarter of last year came from about 11% of 28nm revenue, and about 26% of other mature processes. The larger revenue source was 5/7nm to drive the average product price, and 16nm was to cooperate with Netcom. WiFi 6 related upgrade requirements. The industry has judged that once the foundry process matures, it will be mainly reflected in the application orders related to the world's advanced large-size driver ICs.

PSMC emphasized that none of the customers had signed long-term contracts before, but later, in order to ensure production capacity, they all signed long-term contracts, so the current price is mainly the long-term contract price.

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