Foundry prices continue to rise, and IC designers have become sandwich biscuits. Not only do they have to establish a relationship with the foundry to obtain stable production capacity, but they also have to face downstream customers to continuously urge the goods.
Some IC design industry privately revealed that “the state of the foundry market this year is not normal.” Now it’s a seller’s market, and the price is up to the seller. After the price increase in January, the order was placed in February. In March, it was notified that the output price would increase in May, so I could only touch my nose to accept it. In this wave of foundry price increases, it is understood that foundries have different ways of adjusting prices for different IC design companies. Some have increased slightly last year, and some have increased once in January and April and May this year. , In addition, when placing orders every month recently, the price has been increased.
The IC design industry revealed that it was more like a letter of intent to negotiate with the foundry about the production capacity required for this year. There is room for adjustment. When the order is placed every month, the price to be paid will be known. However, this year’s foundry production capacity is tight, and it can be said that it has been seen for the first time in the past 20 years, and it can no longer be judged by the previous normality. There are also some IC design companies with a more concentrated filming strategy, saying that the price is set at the meeting during the filming, and there has been no change in the middle so far. It seems that the price should not be increased before the third season.
In the face of this wave of rising costs for foundry and packaging and testing, IC design companies have reached the point where they cannot absorb them on their own and can only reflect them to customers. According to industry players, just like at the beginning of the epidemic, the price of masks rose significantly. At present, the supply and demand of foundry production capacity is out of balance. Related industries will also seek to maximize profits in business negotiations, while IC design customers are now weak. Occasionally set a point of friendship and bargaining.
Fabs grab production capacity ahead of schedule
The serious shortage of foundry production capacity is the biggest problem encountered by IC design factories in the current operation. In order to avoid the same difficulties next year, manufacturers have already rushed to order production capacity in advance.
The directors of China Taiwan Netcom’s chip factory and panel driver IC factory have confirmed that they have begun to prepare wafer foundry capacity for next year, and said that every chip factory should do the same.
The deputy general manager of the panel driver IC factory Surnamed Chen said that in the past, the industry usually started to discuss with the wafer foundry the capacity required for the next year until the end of the third quarter or the fourth quarter, and then the demand would be adjusted on a rolling basis quarter by quarter. However, the supply and demand of production capacity are very tight now, and it is better to plan for next year’s production capacity as early as possible.
He said that when the foundry capacity was tight in the past, it was enough to inform the foundry a few months in advance, but this time the situation is different, and it is also invalid to obtain the capacity from the foundry two months in advance. Automakers are forced to strive for production capacity through political and diplomatic channels, which is enough to show that the supply of foundry production capacity is highly tight.
Judging from the current difficulty of establishing inventory, he expects that the tight production capacity may continue for some time, and increasing production capacity is a top priority.
In addition to the strong demand for notebook computers, the deputy general manager of Netcom’s chip factory, surnamed Huang, believes that remote teaching and remote work simultaneously drive related infrastructure upgrades, and the momentum should continue for some time.
The semiconductor supply chain has been tight since the second quarter of last year. The current market demand is still stronger than the supply capacity. The imbalance between supply and demand has not seen any chance to ease, and the short-term inventory level will not increase significantly. The unsatisfied demand in the first half of the year will continue into the second half of the year, and he expects that there should be no unexpected big changes in the economy in the second half of the year.
The tight foundry production capacity may last for a full year this year. The vice general manager of the microcontroller (MCU) plant business revealed that customers have prepaid 2022 in advance, just to ensure that the production capacity is safe.
When a stock out occurs, it will inevitably stimulate more demand to ensure that the material condition is intact. The industry generally believes that there is a problem of repeated orders in the supply chain. It is just that before there are signs of excessive inventory and a reversal of the economy, manufacturers still Fully prepare for the future.