[China] Foundries offer discount for IC designers


Pure-play wafer foundries in Taiwan and China reportedly have offered special discounts to their fabless IC clients, due to particularly low utilization rates that are likely to persist through the end of 2011, according to industry sources.


In particular, the foundries have cut prices substantially on mature processes in a move to fill their fabs, the sources indicated. Utilization rates on 8-inch, and 12-inch 65nm and 90nm processes, are comparatively low enabling IC designers to gain bargaining power when negotiating prices, the sources said.


In addition, unspecified TV-chip designers pointed out that many second-tier foundry service providers are adopting discount strategies to lure in more business, and help ease the pressure of their declining ASPs.


Sources at analog IC suppliers also commented that their foundry partners are willing to negotiate lower prices while facing falling utilization rates.


Major foundries Taiwan Semiconductor Manufacturing Company (TSMC) and United Microelectronics Corporation (UMC) have seen their utilization rates fall to about 70%, and utilization rates for the fourth quarter are still under downward pressure, according to industry sources.


Source: Digitimes