Taiwan-based pure-play foundries intend to stay firm on prices, despite a cutback in orders for display driver ICs and other consumer chips, according to industry sources.
The order cutbacks will drag down Taiwan-based foundries' fab capacity utilization, with some reaching as low as 90% in the third quarter of 2022, said the sources, adding that the foundries have seen their fabs fully utilized so far this year.
TSMC, United Microelectronics (UMC) and Vanguard International Semiconductor (VIS) will be able to run their fabs at 95% or more capacity utilization in the third quarter, the sources indicated. The top-3 Taiwan-based foundries will still be capable of generating on-year profit increases in the second half of 2022 and reporting record-high profits for the year, the sources said.
VIS has seen Novatek and other DDI customers pare back wafer starts, but has started to regain some of the chip orders that had been shifted to 12-inch wafer fabrication for cost reasons, the sources indicated. Besides, the LTA contracts the 8-inch foundry has obtained will continue to buoy its sales performance through 2023.
UMC has also seen clear order visibility from its LTA customers, and the foundry's contract with Samsung Electronics is so far unaffected by the Korea-based vendor's reported slowdown in chip purchases, the sources said.
At TSMC, sub-7nm manufacturing capacity remains popular. Despite some major clients adjusting their orders for advanced process manufacturing, the overall demand for TSMC's sub-7nm process manufacturing remains robust, the sources noted.
