Ian, could it be that the roadblock to growth is actually not so much in the fabs, or vacillations in chips end demand, but shortage of wafers? The only wafer producer for which I can ge get cogent financial reports is WFR. They have very little money to invest in expansion. They just bought for some $70 MM 40% additional percents of Posco (a joint venture with Nippon Steel), for which they had to go and borrow more money (as if their balance sheet was not dismal enough, with some $850 MM in debt, oops, by now probably more like $920 MM). At last count they had less than $20 MM in cash, and frankly, I do not see where they'll get the money to increase facilities. Furthermore, their meager operation margins still do not cover their SG&A and R&D costs (thus further cash bleeding).
They had a good 300 mm pilot program, and in the last quarter they must have sold some $2 MM worth of these. Real peanuts. Sure Wacker and SEH are there as well, but I am not sure if they have much money for expansion either.
I for one did not see any announcements of expansion plans of wafer production facilities, on the contrary, smaller diameter wafers facilities were closed down, rather than being upgraded to 200 mm or converted to 300 mm. Without wafers, how does the industry expect to get to $300 MM in annual shipments in the next two years?
Zeev |
