Wafer manufacturing in Taiwan is getting substantially cheaper this year.
Digitimes reports that prices for wafers built on mature node processes have been dropped by 10 to 15 percent because of declining production costs. Of course, it is not just a selfless move; the intention is to convince customers to order more chip and build up inventory.
That, however, may not be such an easy argument, given the general uncertain business outlook and macroeconomic challenges. While the publication said that chip inventories are at "safe levels", it is unlikely that chip customers will be rushing into premature orders if they don’t know how the market will develop in the new year.
Digitimes noted that chip inventories were at "excessive levels between the end of the second quarter and the beginning of the third quarter," which was causedby a "combination of negative macroeconomic factors such as weak consumer confidence in the U.S. and the European crisis."