IC industry headed towards 'dangerous glut' of capacity
Mark LaPedus
03/22/2004 3:10 PM EST
URL: siliconstrategies.com
EL SEGUNDO, Calif.--Capital spending in the semiconductor industry is expected to increase by 38 percent this year, but the market may be headed towards a "dangerous glut" of fab capacity in the near future, according to a new report from iSuppli Corp.
For the past two years, there was minimal capital spending for chip capacity. In 2003, capital spending in the semiconductor industry grew a modest 9.7 percent, according to iSuppli.
At present, however, there are more than 30 companies that plan either to establish or increase existing 300-mm manufacturing capacity, said Len Jelinek, an analyst with iSuppli of El Segundo. In 2002, iSuppli identified 14 300-mm fabs in production. Some 21 percent of those 300-mm fabs were owned by pure-play foundries, he said.
"In 2004, the number of 300-mm fabs will reach 24, with 29 percent of these being owned by foundries," Jelinek said. "By 2006, iSuppli anticipates there will be 47 300-mm fabs in production, but only 19 percent will be owned by pure-play foundries."
Over the next two years, only one new 300-mm fab owned by a pure-play foundry will be built. That fab, Taiwan Semiconductor Manufacturing Co. Ltd.'s Fab 12B, is under construction.
"All of this expansion most likely will leave the semiconductor industry vulnerable to a new round of overcapacity and severe price declines," he said. "For now, the asset-light strategy of divesting from chip manufacturing that was in vogue among IDMs during the downturn appears to be fading into the past," he said.
"However, iSuppli wonders if it will re-emerge when the next downturn arrives," he added. |
