Korean media reported earlier that in response to the downturn in the semiconductor market, Samsung’s foundry business plans to adopt a strategy of “attacking high-end and abandoning maturity” and transfer mature process production line personnel to high-end production lines to sprint 3nm production, and even gave up major customers under mature manufacturing processes, but Samsung subsequently issued a statement denying it.
Under such circumstances, it was reported in the industry that Samsung not only did not give up the business of mature manufacturing processes but also resorted to a more aggressive price war to grab orders, hoping to turn the tide and obtain more orders to fill production capacity.
Taiwan’s Economic Daily reported that Samsung has launched a price war against other manufacturers with its foundry quotations. The quotations of mature process OEMs have dropped by as much as 10%, and it has successfully won orders from some Taiwan-based Netcom chip factories. After Samsung started the price war, manufacturers such as UMC and World Advanced also began to offer price cuts to customers.
According to the latest survey by technology market research agency TrendForce, the global market share of Samsung’s wafer foundry was still 15.5% as of Q3 last year, ranking second in the world. The sum of the three companies, UMC, GlobalFoundries, and SMIC, ranked third to fifth.
The supply chain believes that Samsung’s foundry business was originally based on the production of its own chips, but the current environment is headwinds, and the demand for Samsung’s own chips has been simultaneously frustrated, so a large number of idle production capacity has emerged. In order to fill the vacancy in production capacity, it is inevitable to bargain for orders.
The supply chain pointed out that Samsung’s foundry quotation was originally slightly lower than that of its peers, and now if it is cut by 10%, it will definitely become a means for those customers to force their original partners to reduce prices. To put it simply, “If you don’t lower the price, I will go to Samsung for production”, which puts the foundry industry under common pressure.
In this regard, UMC responded that the visibility of orders at this stage is low, and this quarter is full of multiple challenges. The capacity utilization rate will drop from 90% in the previous quarter to nearly 70%. It will drop to the lowest point in the past seven quarters, but demand is expected to gradually pick up in the second half of the year.
