"Severe shortage" of foundry capacity seen by 2003, despite rapid expansion...
Semiconductor Business News
(07/10/00, 03:51:27 PM EDT)
semibiznews.com
PHOENIX-Even though dedicated foundries are expected to more than double their capacity over the next couple of years, they could end up with a "severe shortage" of capacity by 2003.
And it could come even sooner in some product categories, according to a new study by Semico Research Corp. here.
The Phoenix market researcher estimates that dedicated foundries plan to increase their global wafer capacity by 50% this year and another 50% by 2002.
Historically, dedicated foundries get most of their business from the fabless semiconductor companies. Because of a proliferation of these fabless suppliers, foundries such as Taiwan Semiconductor Manufacturing Co., experienced nearly a 10-fold growth from 1991 to 1999.
This growth is continuing, Semico points out. Wafer demand from fabless companies isgrowing more than 40% so far this year over 1999. Companies such as Altera, Xilinx, Sandisk, and Silicon Storage Technologies are experiencing explosive growth due to growing digital consumer and communications markets, the market researcher points out.
Despite this growth, fabless companies still represent less than 20% of the total global semiconductor market, Semico points out. Today, the foundries are getting most of their growth from the top tier chip companies, the so-called integrated device manufacturers (IDMs).
A good many of these IDMs-including Lucent Technologies, LSI Logic, Motorola, and National Semiconductor-increasingly are making foundries a key part of their manufacturing strategies. They are doing this to reduce their own exposure to risk, increase their manufacturing flexibility, and even to keep up with leading edge process technology.
Also, after cutting back their capital spending during the 1998 downturn, many companies are now turning to foundries to make up for shortages in capacity for certain booming products. As Semico points out, as the overall industry gears up for a year of more than 30% growth, the increased use of foundries is becoming a need rather than just an option. |
