I do not see to much problem in excess foundry capacity at the next upturn - there will be a lot of 0.35/0.30um capacity, probably balanced 0.25um capacity, but most likely a scarcity of sub-0.25um foundry capacity. This overcapacity now has caused a lot of the current bunch of investors in Far East to lose confidence in semi-investments. For the first time Taiwan lost money in semi - Vanguard, Kuotech (lost it big!), Mosel-Vitelic etc. There might be some money to convert a few these 0.35um fabs to deep UV, but I just can't see the money freeing up int he near future to build brand new sub-0.25um fabs, let alone 300mm lines.
On top of that, both the Koreans and Japanese have vastly scaled backt their investments.
I see the next upturn right around the corner - at sub-0.25um. If I am right, that means within one year.
As an example of what 0.35um vs 0.25um can mean - I just built a computer using the Matrox G200. The 0.35um graphic chip should really be called a heater. All this heat will be gone at 0.25um. And that's only for a VGA chip. A lot of these system-on-a-chip stuff just won't be feasible at 0.25um. Demonstrated, yes. Fully consumer ready price wise and ease of use, need sub-0.25um.
Thanks for the angle on the number of designers. To me, system on a chip won't really take off under one gets to sub-0.25um. At that point, it will be quite a task to build the design teams to turn out enough building blocks for the chips. Notice how much trouble NSM is having getting out their Cyrix/GX stuff. I bet you the trouble comes from both a lack of processing as well as a lack of enough designers.
In this view, LSI will be nicely positioned.
I still like this company, the only thing that worries me is the stock market will tank and take the whole economy with it. IMHO, I think we have hit bottom for international economic crisis. But if US tanks because of the stock market, all bets are off. I hope the Feds will take this stock market drop seriously.
patrick |
