With the sharp decline of the terminal consumption market, some small and medium-sized IC designs have been delayed due to customers’ delay in supplying goods. In addition, in order to obtain the production capacity of fabs and packaging and testing plants during the boom, they are forced to sign long-term contracts with suppliers, or even prepay for goods. , when the inventory cannot be realized, and the cash is stuck on the wafer end or the sealing and testing end, it also puts the small and medium-sized IC design under pressure of capital turnover.
The industry pointed out that in the past, when the boom was booming, some IC designs had a small revenue scale and customers’ willingness to accept price increases greatly increased. In order to grab wafer production capacity, they did not hesitate to sign long-term contracts with fabs. How might the boom be significant? Cooling down, customers not only do not buy goods, but also require IC designers to reduce prices, which puts pressure on operating equipment.
In particular, the overall market situation has reversed too fast, and the wafer manufacturing time is regarding three months. Some IC designs cannot adjust the amount of wafers in time, so they can only keep the inventory level rising. Some industry players worry that if the inventory level is too high, If it is eliminated within one year, then it will only be able to suffer the loss of inventory decline and be willing to pay the fab liquidated damages directly.
In addition, the same situation not only occurs on the wafer side, but also because the packaging and testing factories dare not invest rashly at the high point of the boom, so they sign long-term contracts ranging from 3-7 years with IC design companies, and even require prepayment as follow-up investment. IC design has also become a sandwich between brand factories, large wafer fabs and packaging and testing factories. The industry expects that this wave of prosperity will cool down too fast, and some small and medium-sized IC designs may be eliminated.
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