According to a report by Taiwan Economic Daily, industry sources have revealed that due to sluggish terminal demand and market competition, TSMC and Vanguard have recently been progressively lowering their prices for 8-inch wafer foundry services, with reductions as high as 30%.

While 8-inch wafer foundry services do not constitute a major portion of TSMC’s revenue, the company has historically maintained a relatively steadfast pricing strategy, refraining from frequent price hikes or reductions. The current reduction of up to 30% has raised significant attention.

The report states that the semiconductor industry is experiencing a downturn in prosperity, resulting in decreased capacity utilization at wafer foundries. Within this context, demand for 8-inch wafers is weaker compared to 12-inch wafers, leading some manufacturers to see their 8-inch wafer utilization rates drop to around 60%.

Regarding the price reduction, analysts at Nomura Securities suggest that this move is primarily aimed at countering Texas Instruments (TI), a global leader in analog ICs, which has significantly lowered prices for products such as power management ICs, triggering a worldwide semiconductor price war that has impacted related industries. In response, IC design companies are hoping for price reductions from foundries such as TSMC and to lower costs and compete against TI.

IC design firms have indicated that they have not received any official notification of price reductions for 8-inch wafer foundry services. They emphasized that TSMC has never implemented such a substantial reduction of up to 30% since its establishment, raising doubts about the authenticity of the news. TSMC has declined to comment on pricing matters.

(Photo credit: TSMC)