As market conditions improve, TSMC contemplates a secondary price increase for select processes
Following a year of plummeting demand, the global semiconductor supply chain has been mired in a quagmire of order cancellations, price cuts, breached contracts, and financial losses. Signs of improvement have recently emerged in the beleaguered semiconductor market, reminiscent of a faint glimmer of hope at the end of a dark tunnel. Some manufacturers anticipate that capacity utilization and revenue will rebound in the second quarter of this year.
According to Digitimes, foundries are expected to see revenue and capacity utilization rates rise sooner than anticipated, while rumors circulate that TSMC is assessing market trends and capacity for the second half of the year, potentially implementing a second round of price increases for certain processes and raising foundry quotes. If TSMC’s strategy proves successful, more foundries may be emboldened to follow suit with their pricing.
It is understood that TSMC’s 28nm capacity will remain fully utilized until the end of this year, while the utilization rates of popular capacities like 4/5nm are gradually increasing. Previously, major foundries, including TSMC, had projected a decline in revenues for the first quarter of 2023, while being exceedingly cautious and conservative regarding the timing of a market rebound.
Notably, the driver IC industry, which experienced the earliest sharp decline, is now seeing prices stabilize as inventory reductions reach their conclusion. Due to increased end-user shipments, some customers have begun replenishing their inventories or preparing for new products, with certain manufacturers unexpectedly raising prices for some driver ICs by 10% to 15%.
Nevertheless, some manufacturers continue to face challenges, such as MediaTek, which has managed to maintain its performance for the time being but remains cautious about projections for the entire year of 2023. Additionally, industries like MCU are struggling, with inventory reduction efforts still underway following a precipitous decline.
