US chip vendors increasingly shift orders from China foundries
Cage Chao, Taipei; Jessie Shen, DIGITIMES
Tuesday 14 September 20210
 Credit: DIGITIMES
US chip vendors have increasingly shifted their orders away from China-based foundries to mitigate potential risks arising from the ongoing trade tensions between the US and China, according to industry sources.
Taiwan-based foundries are expected to benefit most from this trend, the sources said.
Despite the orders shifted, China-based foundries have managed to have other fabless customers mainly China- and Taiwan-based ones immediately fill the capacity gap left by its US clients, the sources indicated.
China-based foundries' capacity utilization rates could serve as early indicators of a reversal of the overall chipmaking market demand, said the sources, adding that their still-high utilization levels suggest that demand remains robust.
In addition, wafer quotes offered by China-based foundries including Semiconductor Manufacturing International (SMIC) and Huahong Group have come close to those offered by TSMC and other fellow Taiwan-based peers, according to sources at Taiwan-based fast-charging IC and other peripheral chipmakers.
But the costs per chip manufactured at China-based foundries could be actually higher compared with those offered by Taiwan-based foundries if manufacturing yield rates, lead times and other services ae taken into consideration, the sources noted.
TSMC has yet to adjust its quotes, but reportedly plans to raise the quotes by as much as 20% starting next year. The upcoming price increases will also be reflected in the orders scheduled to be fulfilled starting December.
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