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Non-Tech : Kirk's Market Thoughts -- Ignore unavailable to you. Want to Upgrade?

To: Sun Tzu who wrote (12199)	10/21/2021 11:34:50 AM
From: Kirk ©	1 Recommendation Recommended By Sun Tzu Read Replies (1) \| Respond to of 26834

Price pushback starting... IC design houses see clients increasingly reluctant to accept price hikes Monica Chen, Hsinchu; Willis Ke, DIGITIMES Thursday 21 October 20210 Taiwan-based IC design houses, particularly those engaged in consumer ICs, have come under increasing pressure to maintain their quotes for 2022 as customers are more reluctant to accept further price hikes, according to industry sources. IC designers have been able to raise quotes for the third and fourth quarters of 2021 to reflect increases in foundry and backend costs, but few of them are able to further hike prices in the first quarter of 2022 amid a slowdown in terminal demand momentum and their profitability will trend downward starting the second quarter, the sources said. Terminal demand grew explosively between second-half 2020 and first-half 2021, with IC designers offering higher prices to vie for more foundry capacity and chip distributors raising prices to hoard more inventory, the sources said. But this is not entirely the case with the second half of the year, with shortage of some chip solutions including display driver ICs (DDIs), MCUs and other consumer ICs gradually easing due to consumer demand showing signs of softening, the sources continued. At the moment, automotive chips and power management ICs continue to see supply crunch, allowing IDMs including Infineon, Renesas, TI and STMicroelectronics as well as other related vendors to hike prices for both chip solutions to cover increased costs for production and raw materials, the sources said But prices for some consumer ICs are beginning to face downward pressure, and chip vendors will find it increasingly difficult to raise quotes in the first quarter of 2022 though TSMC is set to increase foundry quotes by 10-20% next year and other peers will follow suit, the sources noted. Nevertheless, some IC designers opined that terminal demand is declining for some consumer ICs, but is still on a par with past seasonal patterns, and they are optimistic that chip demand for handset and server applications will turn stronger, instead of slowing down, along with the gradual containment of the pandemic. digitimes.com