Samsung wafer foundry reduces prices by 10 to compete for mature manufacturing processes

Source: Tiantian IC

    According to Taiwan Media Economic Daily, Samsung‘s wafer foundry business is facing pressure from shrinking shipments and reducing customer orders, forcing it to lower prices and compete with other wafer manufacturers for orders.

    Taiwanese media recently reported that Samsung has launched a price war for wafer foundries to seize orders, locking in mature manufacturing processes, with a price reduction of up to 10%. Liandian and World Advanced have also begun to have conditions to lower prices for customers. As the price reduction and order grabbing battle begins, it is feared that the expected stable average unit price (ASP) may be broken.

    Industry insiders have analyzed that due to the drastic inventory adjustment in the PC and consumer product markets compared to expectations, it has affected the mature wafer foundry process and some relatively advanced 7/8nm production capacity utilization. TSMC and Samsung are unable to escape the impact, especially Samsung‘s wafer foundry customer base is more concentrated, and the impact is more significant. From the current deterioration of the global economic outlook, many large American manufacturers have plans to adjust the speed of new product distribution, reducing the demand for wafer foundry capacity in the short term.

    The supply chain points out that Samsung wafer foundry previously quoted slightly lower prices than its peers, but overall market demand is still sluggish. Samsung will reduce its quotation by 10%, which is bound to become the basis for IC design factories to negotiate prices with other wafer foundry factories. "If you don‘t lower the price, I will switch to Samsung production," which puts pressure on the wafer foundry industry.

    According to the latest TrendForce survey, as of the end of the third quarter of last year, Samsung wafer foundry had a global market share of 15.5%, ranking second. Although it significantly lagged behind TSMC‘s 56.1% market share, it was close to the combined third to fifth place companies of Liandian, Grid Semiconductor, and SMIC International.