In the fourth quarter of the utilization of contract manufacturing of semiconductor products will decline

According to industry sources, the company, TSMC and other contract manufacturers of semiconductor products in the next quarter will face a shortage of orders and not be able to fully load your power.

Anticipating this development, some of them have already started to offer discounts, hoping to attract customers.

The company United Microelectronics (UMC) expects to reduce the load in the current quarter to 84-86%. In the second quarter this indicator was equal to 89%.

Meanwhile, the company does not have its own production capacity, losing ground in negotiations with customers. This can lead to a price war among chip designers. Many of them in the fourth quarter of 2016 will face a reduction of gross profit, say the representatives of the industry. For example, the company MediaTek has recorded in the last quarter, a record low gross profit of 35.2%, despite sales growth. At year end, the company hopes to keep its gross profit in the range of 35-38%. It is expected that MediaTek’s revenues will grow over the year by 25%.

Source: Digitimes

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