On August 15, DIGITIMES reported that industry sources revealed that despite a rapid slowdown in mass market chip demand, automotive chip demand remains strong and suppliers are seeking to secure additional available fab capacity in the fourth quarter of 2022.

Suppliers engaged in the automotive industry supply chain are actively negotiating with foundries for available fab capacity in the fourth quarter and are seeking to secure additional capacity support in that quarter, the sources said.

On the other hand, the sources noted that the slowdown in demand for personal computers and other consumer electronics applications has dragged down the capacity utilization of foundries. Nonetheless, automotive chip orders will only cover a small portion of the capacity shortfall in the third quarter.

In the fourth quarter of 2022, foundries that do not have the ability to fill their fab capacity with more automotive chip orders, especially second-tier foundries, will still see their fab capacity utilisation drop significantly, the sources said.

Sources said that for first-tier foundries, only 5-10% of fab capacity will be affected by weak orders for mass-market products in the fourth quarter.

Currently, the supply of seriously tight automotive chips including MCU and IGBT. sources pointed out that the supply of industrial grade MCU and other ICs also remains relatively tight, which also prompted the relevant chip suppliers to compete for more available capacity in the fourth quarter.

However, as industrial ICs have a shorter validation time than automotive chips, industrial chip orders may fill the capacity gap left by foundries in terms of PC and other consumer electronics chip customers more quickly.