Such Chip Companies, Facing A Wave Of Layoffs
The technology industry is in a downturn, and companies are cutting salaries at the top, encouraging employees to take time off, and not making up for shortages. Even though the industry is emphasizing that "there is no unpaid leave," industry insiders are not afraid to say, "layoffs are worse than unpaid leave, I'm afraid this year will be very sad." Related storms from Innolux and other panel manufacturers all the way to the upstream drive IC factory, highlighting the severe panel market conditions.
Driver IC factory previously benefit driven outbreak laptops, TV sales good, common profit during the past two years, manufacturers making aggressive recruiting talent, and start the raise wages or salary increase, structural and distribution of high dividends, is now coming from executive pay cuts and planning layoffs, contrast, weak, driver IC is the main reason why the panel market price plummet, epidemic bonuses back away.
It is understood that the relevant redundancy plan is different from the past year-end performance assessment of "eliminating the weak to retain the strong", but the operator operating pressure fryer, to significantly save costs, reduce operating expenses measures. Operators admit that the current inventory level is still high, financial pressure, considering the decision to reduce salaries and layoffs is not easy, but there is no way, to face the next possible loss of the challenge, a variety of programs that may be helpful to the company's operation are under discussion.
The future of the industry is chilly
Upper panel key components index of driver IC factory was planning on Chinese new years ago started layoffs, industry insiders said panel related chip factory not only high pressure, the IC design industry is having a hard time this year, mainly upstream have foundries are not wholesale prices, even about default pressure, long still have to face the client demand is weak, downstream mostly compete to bargain, To obtain orders, these factors affect the IC design factory in the second half of the gross profit and profit.
At present, most IC design factories actively remove inventory, control orders, and try their best to retain cash to avoid increasing the financial pressure caused by the continuous high inventory level. At the same time, they must reduce the price of goods to "fight for cash". Some IC design companies have pointed out that the average unit price (ASP) has been declining since the third quarter, saying, If we want to ask customers for more goods, we must lower the price.
The IC design factory, which was not named, admitted that some of its products were indeed in poor demand, and that "the subsequent sales volume could not be estimated" and the visibility was low. Basically, clients now don't want to pile up inventory and order as much as they need. Market buying is poor, resulting in IC inventory removal speed may be slower than expected.
IC designers have also begun to revise the amount of chips they put into foundries as inventory is not running as fast as expected. Shengqun, a microcontroller (MCU) manufacturer, revealed that the IC output in the fourth quarter was only about half of that of the previous quarter after cutting down on the amount of chips. However, many IC design factories have mentioned that wafer foundries are not willing to cut prices, only a few manufacturers are willing to join the difficulties, and even said that TSMC will go ahead with the original price hike plan next year. Because the wafer foundry cost is high, let IC design factory quite headache.
In order to control the high inventory, Yilong, the world's leading IC for touch pad modules and touch screens, will terminate the three-year production capacity guarantee contract with wafer foundries in advance this quarter, and include the related liquidated damages as an outside loss. This is the first case of a long contract breach between a domestic IC designer and a wafer foundries, which is highly concerned by the market.
