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To: Donald Wennerstrom who wrote (4315)	8/25/2000 6:43:56 PM
From: Proud_Infidel	Respond to of 5867

Wafer capacity appears to be slowing as fab shells fill up New report shows plant utilization extremely high at 95.5% in Q2 By J. Robert Lineback Semiconductor Business News (08/25/00, 05:00:39 PM EDT) SAN JOSE -- Worldwide wafer fab capacity nudged up 3.3% in the second quarter of 2000 compared to unit volumes in the first three months this year. New figures released by the Semiconductor Industry Association here show wafer-processing volumes increasing at a much slower rate than the first quarter's growth of nearly 10%. In addition, wafer fabs are tapped out, running at record levels of utilization, according to the report. "Quite a few of the [empty] fab shells have been outfitted and expanded," observed chip analyst Bill McClean, president of IC Insights Inc. in Scottsdale, Ariz. "Capacity utilization is still high--at greater than 95%. And, I think it will be more difficult to expand capacity, and we should see IC pricing starting to climb." The new Semiconductor International Capacity Statistics (SICAS) report, released this week by the SIA, shows IC capacity utilization for MOS wafer fabs at an astonishing level of 95.5% in the second quarter vs. 95.2% in the first quarter. A year ago, MOS integrated circuit fabs were running at 89.9% of the installed capacity, according to the SICAS report. In the third quarter of 1998, MOS integrated circuit fabs were running at just 81.6% utilization--the low point in the last industry downturn. Perhaps more telling than the unprecedented high levels of fab capacity utilization is the slowing of growth in wafer-processing volumes in the second quarter. McClean and other industry analysts believe the chip industry has been able to keep pace with growing demand for ICs by equipping existing plant buildings and upgrading older facilities. But that now appears to be ending and the likelihood of chip shortages is looming. The new capacity report shows total IC fab volumes reaching 2.034 million six-inch equivalent wafer starts per week in the second quarter--an increase of 3.3% from the first quarter's 1.969 million. In the first quarter, IC wafer starts grew 9.6% from 1.796 million in the fourth quarter 1999. The growth in MOS fabs producing ICs with feature sizes below 0.3 micron grew 7.7% to 623,100 wafer starts per week in the second quarter vs. 578,600 in the first quarter this year. In this segment, wafer capacity surged by 25% in the first quarter over fourth quarter 1999. Total MOS integrated circuit fab capacity grew 3.5% to 1.816 million six-inch wafer equivalents from 1.755 million in the first quarter. The first quarter's total capacity in MOS ICs was 10.7% higher than 1.586 million in the fourth quarter of 1999, according to the SICAS report. Bipolar wafer processing capacity grew 1.8% to 313,600 five-inch equivalent wafers in the second quarter from 308,100 in the first quarter of this year, the new report said. The bipolar capacity growth rate was about even with the first quarter.

To: Donald Wennerstrom who wrote (4315)	8/29/2000 8:33:16 PM
From: Proud_Infidel	Read Replies (3) \| Respond to of 5867

Simply awesome news! TSMC says it's sold out of foundry capacity for 2001 and 2002 By Mark LaPedus Semiconductor Business News (08/29/00, 07:02:34 PM EDT) SANTA CLARA, Calif. -- Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) here today disclosed that the company is already sold out of its worldwide wafer-foundry capacity for both 2000 and 2001, with demand remaining robust at least until 2003. "Demand is outstripping supply [in the foundry business]," said Edward Ross, president of TMSC's U.S. subsidiary, TSMC North America, at a panel discussion at the Taiwan Semiconductor Day conference here. The conference is a one-day event sponsored by the Taiwan government and CMP Media, the parent company of SBN. "In the short term, I don't see anything on the horizon that will slow [the foundry business] down," said Ross, who is based in San Jose. In fact, business is so good that TSMC is fully booked at least until the end of 2001, Ross said. "The demand for 2001 is greater than our capacity," he said in an interview with SBN. "We've allocated our capacity [for 2000]. In 2001, our capacity has been allocated. In 2001, we're already sold out." The company's disclosure comes to no surprise to industry observers and analysts. With the general trend towards outsourcing in the semiconductor industry, foundry vendors have been scrambling to meet huge OEM demand since the beginning of last year. Other pure-play foundry vendors, including Singapore's Chartered Semiconductor Manufacturing Pte. Ltd. and Taiwan's United Microelectronics Corp., are also reporting robust demand for their respective services. Foundry companies, in fact, are riding a huge wave. In total, the worldwide demand for 8-inch wafers is expected to jump from 10.267 million units in 2000 to 12.3 million units, according to estimates from Dataquest Inc. of San Jose. "The foundry business is one of the fastest growing industries in the electronics market," Ross said in a presentation about Taiwan's foundry industry at the conference. "At this point, we don't see a change in terms of supply and demand. People are saying that that we could see [a capacity shortage] for the next three years." To meet demand, TSMC is ramping up its fab capacity at a frenetic pace. The company will boost its total production of 8-inch wafers from 3.4 million units in 2000, to 4.7 million units in 2001. By 2001, in fact, TSMC claims it will be the world's largest IC company in terms of total wafer capacity, surpassing the likes of Hyundai, Hitachi, Intel, Toshiba, NEC, STMicroelectronics, Samsung, and others.