Samsung Electronics and TSMC are shrinking their 8-inch wafer capacity in the foundry (contract chipmaking) business, according to an analysis.
Market research firm TrendForce said on the 13th that global 8-inch wafer capacity is expected to fall 2.4% from a year earlier. However, it noted that as demand tied to the spread of artificial intelligence (AI) continues to grow, some foundries may move to raise prices.
An 8-inch foundry corresponds to an older node than 12-inch. However, as demand for Power Semiconductor (power ICs), which are mainly produced on this node, increases with the spread of AI, utilization is holding at a high level, TrendForce analyzed.
TrendForce said, "Foundries are reviewing price hikes of 5% to 20%," adding, "Given uncertainty in end-market demand and expense pressure from rising prices for memory and advanced nodes, the actual increase could be limited." With Samsung Electronics and TSMC reducing production on 8-inch wafer foundry nodes, some Chinese players and Korean firms such as DB HiTek are also expected to benefit.
TSMC formalized cuts to 8-inch capacity starting last year. Some fabs are slated for full shutdown by next year. Samsung Electronics is also said to have begun trimming 8-inch capacity last year. As a result, Chinese foundries' 8-inch utilization rebounded to a high level last year, and this year's order outlook has been revised up. Foundries in other regions are likewise preparing price increases alongside overall utilization improvements, the analysis found.
TrendForce said, "As last year's orders for AI server Power Semiconductor rose and China's push for domestic semiconductor production coincided, foundry demand in China strengthened significantly," adding, "Some Chinese fabs saw utilization surge sharply from midyear, and they executed catch-up price increases in the second half." It added, "As Chinese foundries have effectively entered full-capacity operation, there has also been a transfer of excess demand to Korean foundries," and analyzed that "global average 8-inch utilization will jump from 75%–80% last year to 85%–90% this year."