Taiwan Semiconductor Manufacturing Co. chairman Zhang Zhongmou proposed that he could not see the “2012” effect of Chunyan’s industrial version. TSMC itself bears the brunt of its own. Seeing the fourth quarter of 2011 and the first half of 2012, order visibility is unable to prevent the internal capacity utilization rate from declining. After that, the foundry quotation has begun to set off a new wave of sales promotion. In the second-line competitors are also anxious to fill capacity vacancies, so as to avoid the continuous expansion of losses, the Taiwanese IC design industry said that this wave of OEM price kills at least 20% of the jump, and finally will not even TSMC is also difficult to earn, and even began to lose money to sell, will stop.

The IC design maker of the alliance said that compared to the end of the second quarter of 2011, the second-tier wafer foundry began to offer discounted price concessions to the third quarter of direct price cuts, and then continue to the fourth quarter of the auction sale. As a matter of fact, TSMC has always been a passive follower and has not even been dancing with second-tier foundries for some time.

However, after Zhang Zhongmou himself also saw the 2012 economic downturn, TSMC business units have begun to take the initiative to seek various ways that may allow customers to increase orders. In the new wave of foundry price wars, they became the executioners and forced the second line. The wafer foundry is again in urgent need.

In view of the fact that the capacity utilization ratios of TSMC, UMC, and SMIC, etc., have all dropped to about 70% in the third quarter of 2011, except for TSMC, which is still profitable, other foundries have started to suffer losses. The pressure of money has also kept the foundry prices stable for some time. But in Zhang Zhong? In response to Taiwan Semiconductor Manufacturing's initiative, Taiwanese IC designers stated that the second-tier wafer foundry is not able to comply with the standard cost of the depreciation expense. The cost of change is relatively tolerable.

As a result, first-tier Taiwanese IC designers pointed out that the price of short-term foundry inevitably falls, and the quote order is too confusing, so it is difficult to assess the cost reduction benefits of the company temporarily. However, the decline in the price of foundry foundry is usually accompanied by a decline in the cost of production of the latter. This will account for more than 50% of the chip cost. Therefore, the increase in the gross margin of wafers is bound to help, but it has to be deducted. The price reduction rate of wafers given back to downstream customers can't say how much the company's gross profit margin can be increased effectively, but 1 to 2 percentage points will be the basic requirement, and the better ones may be more than 3 percentage points.

In addition, due to the fall in the prices of foundry chips, Taiwan-based IC design companies that have a smaller number of chips have begun to have the same wafer foundry prices as those of foreign companies. A far cry from foreign investors, plus the required average wafer gross margin, and less than 10% less than foreign companies, Taiwanese IC design companies have launched a war to replace foreign market share soon, especially in 2012 global 3C. Under the circumstance that scientific and technological products have become cheaper, Taiwan-based chip design companies have no desire to raise the low- and medium-price chip solutions that are expected to effectively meet the needs of customers. This allows Taiwan-based IC design companies to have a desire to rejuvenate in 2012.