According to Taiwan's Electronic Times, industry sources have revealed that China's Taiwan foundries plan to flatten prices in the second half of 2022, while orders for display driver ICs and chips related to consumer electronics applications are being cut.

Sources said the supply chain related to IC design companies such as MediaTek has already made inventory adjustments and downstream equipment assemblers and suppliers are now plagued by excess inventory. However, the sources said TSMC and other Chinese Taiwan foundries will not lower prices to attract more companies and are proposing to hold prices flat for the rest of the year.

8-inch foundry World Advanced responded to TSMC's comments about customer inventory adjustments, saying the adjustments could last through the first half of 2023. The company said the customer's inventory adjustment has shortened order visibility to three months, while the third quarter will reduce its fab capacity utilization to 81-83%.

Tuntex Electronics said falling chip prices have made it difficult to maintain gross margins, a situation that is unlikely to reverse until 2023.

MediaTek's chief executive officer Lixing Cai has said that the company's customers and channel distributors have been actively adjusting inventory levels and that the situation will continue into the next two to three quarters. MediaTek expects revenue to decline sequentially in the third quarter of 2022, and has lowered its full-year revenue outlook to 17-19% year-over-year growth.

TSMC warned at its earnings meeting in mid-July that the smartphone, PC and consumer-related industry supply chains will engage in inventory adjustments in the second half of 2022, with the situation continuing into 2023. The foundry also reiterated its revenue CAGR outlook of 15-20% for the next few years.