With the Start of the Price-cutting War to Grab Orders, It May Break the Original Situation Where the Average Unit Price (ASP) of Taiwanese Factories is Expected to Be Supported

South Korean technology giant Samsung has launched a price war for wafer foundry to grab orders, locked in mature manufacturing processes, and cut prices by as much as 10%. With the start of the price-cutting battle to grab orders, it may break the original situation where Taiwanese manufacturers expected the average unit price (ASP) to be supported.

According to the latest survey by TrendForce, a technology market research organization, as of the end of the third quarter of last year, Samsung foundry had a global market share of 15.5%, ranking second, although it lagged behind the leader TSMC (56.1% ), but it is close to the sum of UMC, GlobalFoundries, and SMIC, which ranks third to fifth, and still has an indicator status.

Previously, South Korean media reported that in response to the downturn in the semiconductor market, Samsung’s foundry business adopted a strategy of “attacking high-end (processes) and discarding mature (processes)” strategies, transferring mature process production line personnel to high-end processes, and fully sprinting for 3 years. Mi production, even at the expense of customers with mature processes, but Samsung later denied it through a statement, emphasizing that mature processes are also indispensable to the company's foundry business, and will continue to try to meet customer needs.

Samsung said frankly a few days ago that the inventory adjustment in the industry has led to a decline in the capacity utilization rate of the foundry business. It is rumored in the industry that Samsung not only did not give up the business of the mature foundry process, but also launched a more aggressive price war to grab orders in the face of declining capacity utilization, hoping to turn the tide and bring more products at a lower price. Multiple orders fill capacity.

According to supply chain analysis, Samsung’s foundry business was originally based on the production of its own chips, but the current economic downturn has simultaneously frustrated demand for Samsung’s own chips, and the idle production capacity has increased significantly. It is reported that Samsung has slashed the price of the mature foundry process by as much as 10% this time, and has won orders from some Taiwan-based Netcom chip factories.

The supply chain pointed out that Samsung’s wafer foundry’s previous quotation was slightly lower than that of its peers, and the overall market demand is still sluggish. If Samsung takes another drastic action and slashes its quotation by 10%, it will definitely become a bargaining point for IC design factories to other wafer foundries. According to, "If you don't lower the price, I will transfer to Samsung for production", which puts pressure on the foundry industry.

Samsung’s foundry’s mature manufacturing process has slashed prices, causing waves in the industry. Taiwanese manufacturers such as UMC and World have begun to carry out price adjustment strategies with customers under conditions. In this regard, UMC responded that it would not comment on market rumors, and the quotations are currently stable.

UMC said frankly that the visibility of orders is low at this stage, and this season is full of multiple challenges. The capacity utilization rate will drop from 90% in the previous quarter to nearly 70%. Gross profit margin will drop sharply in parallel with wafer shipments. The seven-quarter low point, it is expected that as the industry continues to destock, demand is expected to gradually pick up in the second half of the year.

It's likely that Samsung is trying to increase its market share in the wafer manufacturing industry by offering competitive prices for its products. This could result in a price war, where other companies in the industry will also try to lower their prices to remain competitive. A price war can be beneficial for consumers as it can lead to lower prices and improved products. However, it can also result in reduced profits for companies in the industry and potentially even drive some companies out of business.

In general, it's difficult to predict the outcome of a price war, as it depends on a variety of factors such as the financial position of the companies involved, their market share, and their production costs. Nevertheless, this move by Samsung could indicate that the company is seeking to assert its dominance in the wafer manufacturing industry, and it will be interesting to see how other companies respond.