South Korea's 8-inch wafer foundry begins to reduce prices by as much as 10%

Wafer foundries such as TSMC, UMC, Advanced Semiconductor Manufacturing Co., Ltd., and Power Semiconductor Manufacturing Co. have recently been cutting prices and providing diversified profit-sharing models.

South Korean industry sources revealed that South Korea’s 8-inch wafer foundry industry has begun to reduce prices, with some companies reducing prices by as much as 10%, to compete with their counterparts in Greater China.

An employee of South Korea's fabless company said that if foundry companies do not accept price reductions, South Korea's domestic fabless industry may fail. In addition, the recent popularity of AI is also a problem, but it is not sure how much sales this will create for the company.

The industry expects that the trend of Korean wafer foundry price cuts will further expand, which is necessary to maintain capacity utilization. With the increase in 8-inch wafer foundry capacity in Greater China, weakening consumer demand, and slowing growth in the fabless industry, the semiconductor industry in South Korea and around the world is being impacted. In the electric vehicle industry in particular, slowing demand has even led to a complete shutdown of one company that makes automotive semiconductors.

As the entire fabless industry requires foundries to reduce prices, the profitability of foundry companies is expected to further deteriorate, and some even predict that sales will decline in 2024.

Currently, Korean 8-inch wafer foundries include Samsung Electronics, DB HiTek, Key Foundry, Magna Chip, etc. An industry insider predicts that the recovery of the foundry industry will not be realized until the second half of 2024.