The Elec reported that the average start rate of Samsung Electronic’s 12-inch foundry in about 70%, while the average start rate of an 8-inch foundry in the East High Tech (DB HiTek) will fall to 60-70%, part of the 8-inch foundry start rate fell to 50%, in contrast to the first half of last year near full capacity.
The industry attributed the decline in utilization to the issue of declining IT demand in the global economic downturn. With the prolongation of the economic downturn, demand from downstream industries such as smartphones, personal computers and home appliances has been shrinking, while the server market, which should have been robust recently, has also weakened.
In addition, the capacity utilization rate of TSMC, the world’s number one foundry, has also declined. The industry estimates that TSMC’s average foundry utilization rate is 70-75%.
Foreign media believe that the impact of the decline in foundry utilization rate on DB HiTek, Key Foundry, SK Hynix IC, Magner Chip and other 8-inch foundry companies has a greater impact. DB HiTek maintains 60-70% of the start-up rate, but in the case of some 8-inch foundries, the start-up rate has fallen to 50% of the level.
As utilization rates decline, the profit picture is expected to be burdened. Coupled with the increased burden of fixed costs, some foundries have begun to reduce prices, for example, UMC announced that it will start to reduce prices by 10% from the second quarter of this year.
Foreign media said that some Korean foundries have also recently begun to reduce prices. An 8-inch wafer foundry industry leader said, “We are currently making price concessions to strategic customers to small and medium-sized wafer foundries.”
However, industry insiders predict that the decline in foundry utilization will be temporary. This is because demand for semiconductors is steadily increasing with the commercialization of autonomous driving, the Internet of Things and artificial intelligence technologies, and the demand for semiconductor replacement, which has been delayed due to the recession, is high.
Jeong Ki-bong, vice president of Samsung Electronics foundry division, said in a conference call held after last year’s fourth-quarter earnings announcement, “We expect demand and market conditions to recover in the second half of the year, mainly in HPC, data centers and automotive.”
