This year's reservations for domestic 8-inch semiconductor foundries (consignment manufacturing) have virtually ended. The supply of semiconductors is expected to face difficulties this year as well similar to last year’s due to a shortage of foundry production lines. The 8-inch foundry is necessary for parts in automobiles and electronic devices, such as power management ICs (PMICs) and microcontroller units (MUCs). The vicious cycle is expected to continue, including production disruptions for finished products and price increase in foundries due to the supply and demand shortage of semiconductors.

Photo Image

KeyFoundry’s reservations has been fully booked for this year's semiconductor production line. KeyFoundry receives orders for consignment production of semiconductor fabless on a yearly basis. It is providing products to customers who already entrusted the production by the end of the year. DB HiTek, which receives reservations every six months, also closed its production line by the second quarter. The demand for foundry has not decreased when examining the order status from the third quarter. Foundry reservations for the 3rd and 4th quarters are also expected to be completed as soon as the companies start accepting the reservation. Samsung Electronics and SK Hynix System IC are in a similar situation.
Although the 8-inch foundry does not utilize advanced processes, it is considered the cause of the semiconductor supply bottleneck. The bottleneck is getting worse by adding new orders to last year's overloaded orders. Key Foundry and DB HiTek are securing additional production capacity by introducing new equipment, increasing production line efficiency, and improving manpower management. However, it is insufficient to respond to demand as the additional amount is limited to a maximum of 10,000 wafers per month from 5,000 wafers.
An expansion of a new line is considered to be an alternative solution, but it is difficult to make a decision since it requires large-scale investment in units of trillions.

Photo Image
<DB HiTek’s Bucheon Fab Research Center>

Domestic fabless companies are sacrificing their lives by paying extra to secure foundry production lines. Foundries, on the other hand, cannot easily accommodate new customers because there are many factors to consider, such as existing customers. A rise in 8-inch foundry prices is inevitable. The 8-inch foundry prices were estimated to have increased by 20-40% last year. The market for the foundry supplier is expected to continue this year as orders are pouring in.
The similar situation is occurring abroad as well. Taiwan TSMC and UMC produce more than 880,000 8-inch foundries per month. Although it is more than 620,000 sheets per month in Korea, the demand is concentrated in those companies. TSMC also raised the price of its foundry service by up to 20% from this year, and UMC continues to raise prices, increasing the burden on fabless market. It is anticipated that resolving the semiconductor supply shortage in the second half of the year is only a ‘hope.’
By Staff Reporter Dong-jun Kwon (