8-Inch Wafer Foundry Prices Plummet 30%
Taiwan's Economic Daily News has shared insights from the industry, highlighting that TSMC and GlobalFoundries are gradually reducing prices for their 8-inch wafer foundry services. The reduction in prices, influenced by sluggish demand and competitive pressures, has reached a significant 30%.
For TSMC, a prominent player known for its 12-inch wafer foundry and advanced manufacturing, the impact of this reduction on its revenue and profit is anticipated to be limited. However, GlobalFoundries, which relies exclusively on the 8-inch wafer business, might face more pronounced effects. As the production cycle typically spans three months for wafer processes, these changes are expected to manifest from October onwards, potentially affecting GlobalFoundries' performance in Q4.
GlobalFoundries' Chairman, Fang Strategy, addressed the situation, acknowledging that the company has felt the impact of aggressive pricing from major international competitors. The company, though, is determined to proactively navigate these challenges.
Fang Strategy highlighted that despite expectations of a stable utilization rate for wafer fabs in H2 2023, GlobalFoundries foresees an increase in the utilization of their 8-inch wafer fabs. This outlook is driven by inventory adjustments and a global economic rebound. Additionally, GlobalFoundries will carefully evaluate capacity expansion and the construction of 12-inch fabs in the future.
The underlying reason for these price adjustments appears to be a response to significant price reductions by global analog IC leader Texas Instruments (TI). TI's price cuts, particularly in products like power management ICs, triggered a widespread chip price competition, affecting various sectors.
This trend has led semiconductor design companies to hope for price reductions from foundries like TSMC and GlobalFoundries. These reductions, estimated to range between 10% to 30%, are intended to enhance cost competitiveness and counter TI's aggressive pricing strategies.
