VLSI boosts IC, fab-tool forecasts, but is market overheating?
By Mark LaPedus
Silicon Strategies
12/16/2003, 8:55 PM ET
SANTA CLARA, Calif.--The semiconductor recovery continues to pick up steam, although there are some signs that the market is overheating, according to industry analysts at VLSI Research Inc. here today (December 16, 2003).
At the same time, VLSI Research raised its chip and semiconductor-equipment forecasts for 2004--by a wide margin. In fact, happy days could be here again for semiconductor equipment vendors, as that market is expected to increase a staggering 40.1 percent in 2004 over 2003, according to VLSI Research.
The firm also projected that the semiconductor market would grow by 32 percent in 2004 over 2003. In 2003, the semiconductor equipment and IC markets are projected to grow 4.3 percent and 18 percent, respectively, according to the Santa Clara-based research firm.
The new forecasts are different than its previous predications. Last month, the firm projected that the fab-tool and IC businesses would grow 4.2 percent and 13.9 percent, respectively, in 2003 over 2002. At that time, the firm also projected that the fab-tool and IC sectors would each grow 21.3 percent.
"2004 is expected to be a hot year," said G. Dan Hutcheson, president of VLSI Research, during a presentation at its headquarters in Santa Clara. "Next year looks like 2000. The bad news is that next year looks like 2000," Hutcheson said in an interview with Silicon Strategies.
The semiconductor analyst was referring to the boom cycle in 2000, where demand and fab-capacity shortages dominated the semiconductor landscape. The reminiscent signs beget a sense of caution right now--if not concern--especially given the extending lead times and shortages of select components and process technologies in the market heading into 2004.
"There's a clear sign that the IC industry is overheating," he said.
Even fab-tool vendors, which have been hit hard by the downturn, are seeing a sudden demand for their products, said analyst Risto Puhakka of VLSI Research. "Everything is booked out," Pukahkka said.
Demand for fab tools is currently across the board, with the backend portion of the business leading the way. "The backend has led us into this cycle," Hutcheson said. "The backend still leads."
This is not to say the front-end chip-equipment markets are taking a backseat. "193-nm tools are booming," he said. "ALD is also hot." |
