Semiconductor chips to cost less as Chinese chipmakers offer price cuts

Pressure from Chinese wafer foundries’ price reductions is pushing chip prices lower across the semiconductor industry, according to a  report by Taiwan’s Digitimes.

Numerous Taiwanese IC design firms are optimistic, anticipating that local suppliers will maintain the trend of lowering prices, which could alleviate operational pressures and bolster competitive advantages, said the Digitimes report.

Foundries across China, Taiwan, and South Korea, including Samsung Foundry, are reducing prices to retain clients and orders, with strategic cuts and negotiations reflecting a broader trend of market adaptation and customer engagement, Taipei-based TrendForce said in a recent note.

The US Department of Commerce may launch an antidumping investigation if it believes that the Chinese firm’s price cuts are disrupting the market, Digitimes report said.

TrendForce cited a sluggish semiconductor market and stiff competition as reasons for the price cuts across the board, with Samsung Foundry reportedly offering 10% to 15% cuts.

Recently, electronics contract manufacturer Hon Hai, better known in the West as Foxconn, reported a 5.4% year-on-year decline in fourth-quarter sales, marking one year of quarterly drops, and expects further declines, amid weak PC and consumer electronics demand.