Source: Huaqiang Microelectronics Author: Mr.xiao
On November 13, it was reported that the demand for OEM began to decline. Some factory processes do not achieve 100% utilization. This is contrary to the situation set at the beginning of this year when all the advance orders for 2022 are completed. With the stagnation of the memory semiconductor market, it is predicted that even the OEM market responsible for the system semiconductor ecology will be affected.
With the rising price of raw materials for OEM technology, the market will inevitably face a decline in revenue.
The number of OEM process orders of semiconductor fables (fabless semiconductor companies that only engage in design) is dropping sharply. Some of these companies have reached the point where “six month advance orders” cannot be sustained. A person from the 8-inch OEM industry said, “We can’t guarantee all the six month advance orders to ensure the conventional OEM process. It is inevitable that the demand will decrease next year.”. Another said, “Some processes are not running at 100% utilization. We are dealing with existing customer orders; however, new orders are significantly reduced.”
Some representative Korean OEM plants include Samsung Electronics, DB HiTek and Key Foundry. SK Hynix System Integrated Circuit Co., Ltd. moved to Wuxi, China, and focused on the orders of China’s fabless company. IT Home learned that SK Hynix had received orders from at least 6 months to at most 1 year at the beginning of this year. It is experiencing the bottleneck effect that the production capacity cannot keep up with the demand.
The prosperity of the OEM industry did not last for half a year. This is because downstream industries of major system semiconductors, such as smart phones and personal computers, have been hit by the global economic downturn. The prospect of OEM finished products (sets) has deteriorated. These finished products will be equipped with other semiconductor products, such as power management semiconductor (PMIC), display driver chip (DDI), and radio frequency (RF) chip. The bottleneck effect of automobile semiconductor demand is also being solved, such as the micro controller unit (MCU) that has been playing a key role in the healthy finished car market.
The OEM industry expects that the decline in demand will not be reflected in this year’s earnings, because there is enough to complete existing orders. The industry also benefited from the result of high exchange rates. However, from next year, the economic recession is inevitable, because the cost of raw materials required for the OEM process is rising, while the demand is declining. An industry person said: “The purchase price of raw materials such as silicon chips, various materials and industrial gases rose by 10% every quarter.”
Post time: Nov-16-2022