Korean media: The foundry industry is cold, and the visibility of some factory orders is less than 6 months

On November 10, according to South Korean media ETNEWS, the current global wafer foundry demand has begun to decline, and the capacity utilization rate of some factories has not reached 100%, which is completely opposite to the situation expected by the industry at the beginning of this year.

As the price of foundry raw materials continues to rise, Korean media believe that the foundry market will inevitably face a decline in profitability.

The report pointed out that the number of foundry orders of chip design companies is declining significantly, and the order visibility of some wafer foundries has even been shortened to less than six months. An executive from the 8-inch foundry industry said: "A drop in demand is inevitable next year, with some process nodes not being 100% capacity utilised and new orders significantly reduced."

Korean media believe that major downstream industries such as smartphones and PCs have been hit by the global economic downturn. The prospect of foundry demand for semiconductor products such as power management chips (PMIC), display driver chips (DDI), and radio frequency (RF) chips has deteriorated. Bottlenecks in automotive semiconductor demand, such as microcontroller units (MCUs), are also being addressed.

China is considered the largest market for the semiconductor industry, and Korean media said that sales setbacks in this market have hindered exports from domestic chip design companies. The CEO of a South Korean company that supplies automotive chips to China said: “We have to adjust the production of semiconductor products because sales in China have dropped significantly. If we can’t find another market, we will have no choice but to reduce foundry. New orders from the market."

In addition, Korean media also said that the decline in demand in the foundry industry will not be reflected in this year's financial report data, because they have enough original long-term orders. But as the cost of raw materials required for the chip-making process rises and demand falls, a recession from next year is inevitable. An industry insider said, "The purchase price of raw materials such as silicon wafers, various materials, and industrial gases will increase by about 10% every quarter."