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

To: George Statham who wrote (13938)	6/6/2022 9:35:04 AM
From: Kirk ©	1 Recommendation Recommended By Johnny Canuck Respond to of 26422

Mixed messages: More inflation in the chip sector while some are cutting orders? UMC reportedly mulling 6% quote hikes for 22/28nm chips in 2023 Monica Chen, Hsinchu; Willis Ke, DIGITIMES - Monday 6 June 2022 United Microelectronics (UMC) reportedly is mulling raising its 2023 quotes by around 6% for 22/28 nm processes that have been in strong demand, despite uncertainties associated with order cuts by IC designers, according to industry sources. UMC is following in the footsteps of TSMC, which has earlier decided to enforce 5-9% quote hikes on both advanced and mature process nodes in 2023, the sources said. It is already in talks with fabless chipmakers over the exact sizes of quote increases, the sources said. The UMC move comes despite market speculations that except for TSMC, most foundry houses also including Globalfoundries, China's SMIC, and Taiwanese peers Vanguard International Semiconductor (VIS) and Powerchip Semiconductor Manufacturing (PSMC) will be facing the crisis of falling capacity utilization amid IC designers starting to cut orders or asking them to defer production and shipments, the sources continued. Vendors of panel display driver ICs (DDI) reportedly have taken the lead to cut orders with manufacturing partners, and growing oversupply of consumer MCUs are also pressing suppliers to cut prices to digest inventory on the one hand and reduce wafer starts with foundry houses on the other. Power management IC (PMIC), in the severest shortage in 2021, has seen the supply gap narrow drastically this year. All these are beginning to heap pressure on foundry partners to lower quotes, the sources stressed. They remarked downstream brand vendors of consumer devices such as TVs, handsets and notebooks have since late first-quarter 2022 moved to trim their order placements with assemblers, component suppliers and IC designers. IC suppliers focusing on consumer applications are feeling the pinch of order cuts, especially second- or third-tier ones, the sources said. First-tier chip vendors can cushion the impact due to the availability of multiple product lines, close ties with clients or offering exclusive chip solutions. MediaTek, for instance, still released optimistic outlook that its 2022 revenues will grow 20% on year and its CAGR for the next three years will reach around 15%, mainly bolstered by strong demand for 5G, Wi-Fi, 10G POB and PMIC solutions despite slack demand for handset APs, the sources said. MediaTek has adjusted foundry capacity allocations for its product lines instead of reducing overall wafer starts, the sources said, adding that its capacity cut for handset APs has been fast filled by its subsidiaries with new orders. Actually, foundry houses said, order cuts will not significantly trouble the foundry sector because the overall chip demand still maintains a certain intensity, and fabless chipmakers will adjust capacity allocations to meet varied market demand. Among other foundries in Taiwan, VIS has seen clear order visibility throughout 2022 despite DDI suppliers cutting orders, the sources said, noting that capacity vacated for DDIs has been filled by new orders from IDMs or IC designers signing long-term capacity utilization commitments with the company. VIS just hiked its quotes for 8-inch wafer foundry services by 10% in March this year, which is applicable to the entire year, and is expected to drive its 2022 revenues to a new high again, the sources added. digitimes.com