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To: Sam Citron who wrote (53413)	9/28/2001 7:48:41 PM
From: Sam Citron	Respond to of 70976

Capacity utilization of Taiwan’s 8-inch wafer fabs in 3Q varies widely Compiled from outside sources by Vincent Huang, Research <; Shih-wei Kao, DigiTimes.com> [Friday 28 September 2001] Capacity utilization of Taiwan’s eight-inch wafer fabs in the third quarter varied widely, according to Nikkei Market Access. Taiwan Semiconductor Manufacturing Company (TSMC) predicts the capacity utilization of its fabs will gradually increase in the third quarter. The company attributes its optimism to the recent decision by Microsoft to use Nvidia chips in its Xbox game console. Nvidia contracts TSMC to process its chipsets. On the other hand, United Microelectronics Corporation (UMC) expects its utilization rate will be less than 40%. Facing the current market downturn, many of its customers, mainly IDMs (integrated device manufacturers), have been processing IC wafers at their own factories, instead of placing orders to UMC. Taiwan’s major DRAM producers, including Nanya Technology, Winbond Electronics, Powerchip Semiconductor (PSC) and ProMOS Technologies have maintained either 100% or close to 100% of capacity utilization at their fabs. Though recently the 128Mbit DRAM contract price has dropped to less than US$2 in Asia and has rendered them almost profitless, they have not reduced production. They are afraid that if they lower their capacity utilization, it would take considerable more time to increase the yield rate back to the original level and they might lose business opportunities when the market recovers. Tech Semiconductor Singapore is also maintaining near full capacity operation at its DRAM fab. However, according to the survey, Macronix International, a logic IC producer, is suffering a low rate of utilization at its plant. Chartered Semiconductor Manufacturing, a Singapore-based logic IC producer, is also reported to have a capacity utilization rate of 30%. Estimated 3Q capacity utilization at Taiwan 8-inch wafer fabs (thousand wafers): Production, Capacity, Capacity Utilization % by Firm: TSMC 315 720 43.8 UMC 210 540 38.9 Nanya Technology 150 165 90.9 Winbond Electronics 114 114 100.0 Powerchip Semiconductor (PSC) 105 105 100.0 ProMOS Technology 105 105 100.0 Macronix International 30 75 40.0 Silicon Integrated Systems (SiS) 45 45 100.0 Source: Nikkei Market Access, compiled by DigiTimes, September 2001. digitimes.com Question for threaders: How does capacity utilization currently look outside Taiwan? Why is this important? "Only when a foundry’s utilization rate exceeds 80% will it consider expanding production" digitimes.com