Global fabs are facing severe challenges, and the situation is becoming more and more optimistic. According to recent reports, TSMC, the leader of the global chip foundry industry, has also begun to cut prices, not only for mature processes, but also for 7nm processes, with a larger range of about 5% 10%. This action can't help but raise people's questions: Why did TSMC also cut prices?
On the one hand, the decrease in orders in the market is the main reason for the price reduction of fabs. At present, the global chip industry is still in a downturn, and there is a lack of overall orders, and TSMC, as a giant of global semiconductor foundry, has been the world's 55% largest order. Once downstream orders decrease, TSMC also has to face the dilemma of order shortage.
On the other hand, chip manufacturers in Chinese mainland no longer place orders with TSMC, which also has a great impact on TSMC. In fact, foundry manufacturers in Chinese mainland are actively expanding mature production capacity, the overall capacity supply has increased, and the mature process platform has a high degree of overlap with TSMC products, which makes foundry competition increasingly intensified, and also leads to increased downward pressure on mature process **. As the world's largest chip market, although China's own manufacturing capacity is relatively low, many chip manufacturers have chosen to hand over orders to TSMC before. However, due to the Huawei incident, many manufacturers began to turn to wafer factories in Chinese mainland and order some chip orders to local companies. At the same time, the production capacity of wafer fabs in Chinese mainland has also been greatly expanded in mature processes, such as SMIC, Huahong and other companies, whose revenue and production capacity are growing rapidly. In addition, with the release of Huawei's Kirin 9000S chip, it proves that China's own 7nm process has been able to do it, so more manufacturers no longer hand over 7nm orders to TSMC, which shows the determination to support domestic chips. Under this dual influence, TSMC's order tightening problem has become more and more prominent, so it has to adopt a price reduction strategy in order to save orders and improve the utilization rate of production capacity. Judging from the financial report for the third quarter, TSMC's revenue fell by 10% year-on-year8%, net profit decreased by 25% year-on-year0%。These data show that TSMC's current situation is indeed not as good as before, and although there is a lot of capacity available for use, it has fallen into a situation of unsalable orders.
With the rapid development of science and technology, the chip foundry industry is also facing huge challenges. First of all, the overall demand of the global chip industry is insufficient, which has led to the problem of reduced orders, making it impossible for fabs to fully utilize their production capacity. Second, with the rapid rise of Chinese mainland in the field of chip manufacturing, domestic fab competition is becoming increasingly fierce, which has brought greater pressure to global fabs. In addition, technological innovation continues to drive the advancement of chip manufacturing processes, and for traditional fabs, constantly updating equipment and processes is a huge investment, increasing operating costs. Finally, the instability of the global environment has also had a great impact on the chip foundry industry, especially the escalation of Sino-US friction in recent years.
In the face of these challenges, fabs need to be proactive and adopt flexible business strategies. First of all, fabs should increase investment in technology research and development to improve the competitiveness of products. Secondly, actively expand the market, look for more orders**, and reduce the risk of excessive order concentration. Thirdly, pay attention to cost control, optimize the production process, improve efficiency and reduce production costs. In addition, strengthening cooperation with domestic and foreign partners to jointly promote the development of the industry is also one of the keys.
The order crunch at the fab had a direct impact on its operating conditions. First of all, the reduction in orders will lead to a decrease in the capacity utilization rate of the fab, a large amount of equipment is idle, and the investment cannot be recovered, resulting in economic losses. Second, the reduction of ** in order to compete for limited orders, intensifies business competition, which may lead to a decline in industry profit margins. Thirdly, the lack of orders will limit the expansion and development of the fab, unable to meet market demand, unable to provide timely delivery to customers, and thus lose competitive advantage.
However, for the chip ecosystem, the tightening of fab orders also brings some opportunities. First of all, it is an opportunity for fabs to upgrade and transform their technology, and by continuously improving their own technology and process capabilities, fabs can stand out from the competition. Secondly, fabs can actively expand the international market and find more orders**, reduce market concentration and increase stability. In addition, fabs can also cooperate with other industries to develop chip application areas, broaden marketing channels, and improve profit margins.
To sum up, the dilemma and challenges of the global chip foundry industry cannot be ignored. As a key link, the order crunch of the fab directly affects its operating conditions. However, while facing difficulties, fabs can also respond to challenges and seek new development opportunities through technological upgrades, market expansion, and collaborative innovation. Only by constantly adapting to market changes and strengthening innovation capabilities can we maintain the competitiveness of the industry and achieve sustainable development.