Wafer Foundry Prices Increased again by 10-15%

SHANGHAI, Aug 17 (SMM) - According to reports, UMC (United Microelectronics Corporation) recently issued a notice to customers to increase the foundry prices again, with an average rate of 10-15%. This is the fourth time this year that UMC has raised its offer, and it is estimated that after this year's price increase, UMC's cumulative increase will be more than 50%. Some IC designers previously said that UMC's foundry prices have exceeded TSMC (Taiwan Semiconductor Manufacturing Company) in the second quarter.

UMC is the biggest winner in the booming of wafer foundry. The company's July revenue increased by 5.9% to NT$18.366 billion, another record high. UMC emphasized that its order book has been scheduled into 2022, and the company will run in an overloading state until the end of the year. There is also possibility of another price hike in Q4, potentially pushing the annual revenue in 2021 to a record high.

SMIC, the most advanced and largest foundry in mainland China, said on August 6 at its company performance presentation in Q2 that the company's gross margin improvement in the second quarter was mainly contributed by capacity enhancement, product portfolio optimization and price hike. At present, semiconductor manufacturers' capacity expansion and market delivery were both slow, and the scenario of undersupply will continue until at least the first half of 2022. It is expected that prices will continue to move upwards in the third and fourth quarters.

According to a research report, chip design companies and foundries have started tonegotiate about production capacity in 2022, which is still in short supply. In terms of process capability, SMIC and Hua Hong Semiconductor process is progressing rapidly with the introduction of new process platforms and improvement in operational efficiency.

In general, wafer foundry is expected to continue to expand in the next five years, with strategic bullish outlook on mainland wafer foundry assets.