Chipmaker efficiency increases
By Reuters
August 21, 2002, 7:43 AM PT
Chip manufacturers worldwide used their machinery more efficiently in the second quarter as global demand for semiconductors outpaced a small capacity increase, according to a survey released Wednesday.
Capacity use at chipmakers around the world rose to an average 86.4 percent in the second quarter from a slightly revised 77.3 percent in the first quarter, the Semiconductor International Capacity Statistics report said.
Most chipmakers are profitable if capacity utilization is above 70 percent, analysts said.
However, the second quarter will likely prove to have been a peak in use rates because markets for electronics products are weaker than anticipated.
"The third quarter is not looking good, across the board," said Uche Orji, an analyst at J.P. Morgan. Taiwan Semiconductor Manufacturing Co., the world's largest contract chipmaker, has already said it expects capacity utilization to fall to 70 percent in the third quarter from 85 percent in the second.
Foundries such as TSMC are always the first to be hit. But Morgan Stanley last week said it also saw weakening of orders in Europe, particularly at STMicroelectronics and Infineon, while U.S. second-tier semiconductor names were also beginning to see orders slow.
Semiconductor International Capacity Statistics, an organization formed by the world's major chip associations, did not provide use figures for specific manufacturers.
Chip factory capacity totaled a weekly 1.28 million 8-inch silicon wafers on which integrated circuit designs are etched, up slightly from the revised 1.25 million wafers in the first quarter.
Capacity has stabilized as chipmakers are reluctant to invest in capital equipment, which in turn has hurt chip equipment makers.
Although demand for electronics products is rising, many chipmakers believe it may partly be driven by cyclical demand from electronics producers stocking up on inventories and not by a significant recovery of consumer or retail demand.
Demand for PCs and other computers, consuming almost half of all the world's chip production, has been a particular source of concern.
Merrill Lynch this week lowered its 2002 forecasts for IT hardware spending to a 4 percent decline. PC unit consumption is now expected to fall by 1 percent, while demand for cell phones will grow 2 percent. |
