Foundry has a “hot shutdown wave”…

This means that foundries see poor orders for mature processes in the short term and that the situation is difficult to improve.

International electronic business news on the 22nd Comprehensive media reports, due to the weak semiconductor market, several wafer foundries around the world have decided to temporarily turn off the power of some mature process equipment for “Warm Shutdown”. This “hot shutdown wave” was first led by Korean wafer foundries and has now spread to mature process fabs in Taiwan, and three of them have publicly responded; At the same time, South Korea’s 8-inch wafer foundry industry has also lowered prices, and it is not ruled out that the “hot shutdown wave” will further expand…
What is a “hot shutdown”?
Those familiar with semiconductor factory operations will know that fabs are non-stop 365 days a year, and there are no holidays that lead to shutdowns or closures. There are only two cases – Cold Shutdown and Warm Shutdown – when you have to shut down. Warm Shutdown is usually for equipment maintenance and is only down for a few days or 1-2 weeks. Cold Shutdown requires water and power cuts, and restarts can take a month or more, usually when there are no orders on hand, when capacity utilization is too low, or production is reduced.
The recent “hot shutdown” means that manufacturers in order to cope with the sluggish demand, shut down some idle capacity equipment, although the equipment is still in the “uninterrupted” state, the production line personnel will not let the machine arrange the delivery, because the delivery will make the machine power consumption greatly increased, if forced to do, will be produced in the shortest time, no need to re-check the machine.

Since it takes a period of time to adjust once the power is cut off, wafer foundries are now beginning to experience a “hot shutdown” for mature process production lines, which means that foundries believe that mature process orders are poor in the short term and the situation is difficult to improve.
Fabs responded
How many fabs are performing “hot shutdowns” today?
According to Korean media reports, South Korean wafer foundries such as Samsung, Key Foundry and SK Hynix System IC under SK Hynix have a recent mature process capacity utilization rate of only 40% to 50%. Due to the continued weakness of terminal demand, the three Korean foundries have decided to shut down some mature process equipment for a “hot shutdown”.
In addition, according to the latest report of the Taiwan media Economic Daily, the “hot shutdown wave” has also spread to Taiwan factories such as UMC, World Advanced, and PSMC, and Taiwan factories have adjusted their production lines. At the beginning of August this year, affected by the sluggish terminal demand and intensified market competition, TSMC and its 8-inch wafer foundry company, the world’s advanced foundry, recently lowered the quotation of 8-inch wafer foundry, with a maximum reduction of 30%.
At press time, none of the three Korean foundries were available for comment. However, the above-mentioned Taiwanese fabs have responded.
In terms of the world’s advanced aspects, the company has previously said at the legal conference that the overall terminal demand in this quarter is still weak, customer stocking is conservative, order visibility is maintained for three months, and the expected capacity utilization rate is the same as the previous quarter, about 60%, which has included some equipment adjustments and routine maintenance, and it is not surprising that “hot shutdown” is carried out in response to customer needs.
Speaking of mature process market conditions, Fang Luo, chairman of the world’s advanced company, once said that the company and customers face changes and pressures in market conditions, including providing price discounts, etc., but hope that with the recovery of the 8-inch wafer foundry market, the company’s gross profit margin can recover with the increase in capacity utilization, and the goal is to return to the level of 30% or even more than 40%.
UMC stressed that the current operating outlook remains unchanged from the view expressed at the previous legal conference, and there are no signs of a strong recovery in market demand this quarter, in which the capacity utilization rate of the 8-inch fab is lower than that of the 12-inch fab, so the company does have strategic measures to manage the production line, and the order is coordinated with customers.
PSMC said that in the state of capacity utilization is not too high, all costs should also be taken into account electricity costs, the company will reorganize, manage the production line, cost regulation, during this time the company in addition to saving, but also “training”, reserve research and development energy.
In addition to adjusting production line measures, the recent market has reported that after TSMC and the world’s advanced, South Korea’s 8-inch wafer foundry industry has also lowered prices, due to the decline in foundry utilization due to sluggish IT demand and the impact of the conversion to 12-inch processes. According to the analysis of industry insiders, it is not ruled out that the “hot shutdown tide” will be further expanded…