South Korean chip foundries are seeing the operation rate of their fabs drop steeply, TheElec has learned.
With the exception of Samsung, which is still seeing high demand from advanced nodes, local foundry companies such as DB Hitek, Key Foundry, Magnachip, and SK Hynix System IC are seeing their operation rate drop.
This drop started in the fourth quarter and is expected to dip more during the first half of 2023, sources said.
DB Hitek’s operation rate is currently in the 80% range __ it was 95% during the third quarter, according to the company’s own filings to local financial authorities.
DB Hitek’s fab operation rate was 81.9% in 2017 and increased to 91% in 2018, 94.5% in 2019, and 97.9% in 2020. It marked 96.7% in 2021 and 97.9% during the first half of 2022. The company benefitted from the chip shortage and high demand for consumer electronics during the pandemic.
Sources said the operation rate of Key Foundry, Magnachip, and SK Hynix System IC has also dropped to around 70% to 80%.
SK Hynix System IC, which has its fab in Wuxi, China, was especially seeing a steep decline, they said.
Some of the causes of these drops are global inflation which is causing lowered demand for IT products.
More companies have enough inventory due to lowered product sales.
Some chips are still in high demand, however, such as power management IC and microcontroller units. But most other logic chips are seeing demand drop, which is especially affecting foundries that run 8-inch fabs.