South Korean chip foundries are continuing to record lower operation rates in their production facilities, a trend that is expected to continue up to at least the second quarter.
South Korea is home to foundries, or contract chip makers, such as Samsung, DB Hitek, Key Foundry, Magnachip, and SK Hynix System IC.
Sources said these companies are generally seeing their operation rate drop faster than their Taiwanese rivals.
Samsung is the exception and continues to record around 80% operation rate for its 12-inch foundry fabs. However, the yield rate for advanced nodes remains low.
But for 8-inch wafers, Samsung, DB Hitek, and Key Foundry are all recording operation rates between 60% to 70%.
SK Hynix System IC, which has its foundry fab in Wuxi, China, meanwhile, has an operation rate of around 50%.
These companies saw high demand during the pandemic __ DB Hitek recorded over 90% operation rate for its fabs in 2021 and 2022.
But the post-pandemic global inflation and the drop in demand for IT products has also caused chip price and demand to drop.
Most consumer electronics companies are suffering from high inventory as well.