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A new round of price changes in the semiconductor industry, destocking is the core

In the past two months since the beginning of the year, there has been a new wave of price changes within the industry chain, involving original factories, wafer foundries and upstream silicon wafers. Most of these price adjustments are reductions, which shows that the impact of high inventory has spread to all links in the industrial chain. According to the general expectation in the industry, the first half of this year will basically be in the destocking stage. For all enterprises, there will be no small challenges during this period.

The price adjustment strategies of the two MCU factories are different

In early February, MCU manufacturer Holtek confirmed that it would cut prices for distributors, and it is expected that Nuvoton and other manufacturers may follow suit. The MCU market is not improving. Holtek expects that the inventory level will continue to rise in the first quarter of this year, and will not drop significantly until the second quarter, and gradually return to normal. On the supply side, TSMC and UMC foundry quotations are firm, posing another pressure, and Holtek has to cut prices to remove inventory.

At the same time, Microchip, another major manufacturer, plans to raise prices by 3%-8% from March onwards in response to rising material and foundry cost pressures. In the past two years, Microchip has initiated a price increase at the beginning of the year. The difference this year is that no letter was sent, and the agent was simply notified.

Since the second half of last year, there has been more than one price increase initiated by major manufacturers to transfer costs. The continuous increase in the cost of raw materials and foundry has caused ADI, Qualcomm, Intel and other factories to increase their prices one after another, and the latest Microchip is also the same. However, the decline in demand this year continues, and new production capacity of various factories has been released one after another. At this time, the price increase initiated at this time may have limited acceptance in the downstream.

Wafer foundry: Samsung cuts prices and cuts orders, rivals are under pressure

This month, reports pointed out that Samsung started the foundry price war, reducing the price by about 10% for mature manufacturing processes, which has attracted orders from some network communication chip manufacturers. According to the industry, Samsung’s foundry price is already slightly lower than the industry’s, and now it is lowering the price to grab orders during the downturn in the market, and the impact on other competitors is self-evident.

The opening of the destocking cycle has greatly affected the capacity utilization rate of mature process OEMs. Now, coupled with Samsung’s price cuts to grab orders, I am afraid that UMC, World Advanced and other OEMs will find it difficult to maintain their prices. In fact, after Samsung’s price cut, news of the above two factories following up came out.

Judging from the current demand situation, the low-price competition in the wafer foundry industry will evolve into a trend, and each factory will face the most difficult first quarter. But for IC design customers, it will be able to relieve part of the cost pressure and make the process of destocking relatively easy.

Silicon wafer prices loosen for the first time in three years

As the upstream link of the industrial chain, silicon wafers are relatively lagging behind. But the impact of this round of cyclical transformation is also beginning to be reflected in its price changes. The report pointed out that demand from both logic chips and memory has declined, driving the spot price of silicon wafers to fall for the first time in three years.

In terms of classification, the current round of price cuts has weakened in the order of 6 inches, 8 inches, and 12 inches, and 12 inches is the current mainstream wafer size, and the price is still stable. However, the industrial chain is changing every moment amid continuous bargaining.

Recently, it has been reported that many customers are suspending the purchase of 8-inch and 12-inch wafers, and the price reduction alert is still continuing. And as the demand decline continues, wafers are also beginning to face the problem of destocking. It can be seen that silicon fabs, like other links, may also face stagnation in performance in the first half of the year.

Destocking is the core, and there are opportunities in non-consumer demand

It can be seen from the above that this year’s industrial chain price adjustment is mainly to reduce, and it can be seen that destocking is still the main theme. According to the current situation, the destocking process of mobile phones, PCs and other consumer fields will run through the entire first half of the year, and it is difficult to judge the extent of demand recovery in the second half of the year.

At the same time, the global new energy, environmental protection process is still going on, and industrial automation is also the general trend. The demand for chips aroused in these fields is not inferior to that of traditional consumer electronics. For the majority of enterprises, strengthening internal strength and layout transformation in this challenging year will lay a good foundation for the future.