Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: orkrious who wrote (7696)	11/23/2001 2:37:55 PM
From: Zeev Hed	Read Replies (2) \| Respond to of 99280

Right now I have next week as weak, starting with a possible "mark them up" premarket and then down, a small bounce by mid day Wednesday, but then the start of the December down ratcheting, from there on, quite "relentless". Zeev

To: orkrious who wrote (7696)	11/23/2001 3:17:05 PM
From: All Mtn Ski	Respond to of 99280

Quick, time to buy more CAPEX gear: IC fab utilization plunges to record low 64.2% in Q3, says new report Increase in wafer starts are slowing; leading-edge capacity grows 7.5% in quarter from Q2 By J. Robert Lineback Semiconductor Business News (11/21/01 08:47 a.m. EST) SAN JOSE -- Wafer-processing IC plants worldwide were operating at a record-low 64.2% capacity utilization in the third quarter, down from 73.1% in Q2 and sharply below 96.4% in same period last year, said a new manufacturing report released by the Semiconductor Industry Association (SIA) here this week. With more than one-thirds of the world's IC-processing capacity sitting idle in Q3, integrated circuit manufacturers were still adding new volume to their production lines. Despite all of the plant closings and cuts in capital spending announced this year, IC fab capacity nudged up by 0.7% in Q3 to 1.324 million eight-inch wafer starts per week from 1.315 million in Q2, said the new Semiconductor International Capacity Statistics (SICAS) report. While the growth in wafer starts was much less than the previous quarter (3.1% in Q2 from Q1), the increase in fab capacity at record-low utilization rates "is amazing and shows just how difficult it is to turn this ship around despite all of the cutbacks," observed analyst Bill McClean, president of IC Insights Inc. "With just two-thirds of the capacity being utilized, we're looking at another big cut in capital spending next year," McClean said. IC Insights is forecasting a 25% reduction is semiconductor capital spending to $31 billion in 2002, down from $41 billion in 2001, which will end up 32% lower than the record-high $60 billion last year. "We don't expect IC fab utilization rates to fall much below the current levels because of the cutbacks and improvements in unit volumes," he said. "But even with the big cutback, next year we are still looking at more than $30 billion being invested in semiconductor plants, which is about what it was in 1999," said the Scottsdale, Ariz.-based analyst. "Those new investments will be going into upgrading facilities and for advanced feature sizes, but not much will go directly into increasing capacity." And one thing is certain, however: Very little new investments are likely in 0.25-micron IC-processing capacity--a technology segment that has been hit particularly hard in the past several quarters, according to the new SICAS report, which was released by the SIA on Tuesday. Capacity utilization of frontend fab lines using 0.2-to-0.3-micron processes has fallen from 87.1% in Q1 of 2001 to just 56.3% in Q3, the report said. The industry's leading-edge processing capacity--capable of fabricating devices with feature sizes below 0.2-micron--has slipped from 80.4% in Q1 of 2001 to 79% in Q3, said the report, which is compiled by the SICAS organization in Vessem, the Netherlands. Eight-inch wafer starts for processes below 0.2 micron increased 7.5% in Q3 to 317,200 per week compared to 295,200 in Q2 (see table below). However, the increase was far less than the 32.1% rise in wafer starts for 0.2-micron and below technologies in Q2 from Q1. The drive of the last industry upturn, the 0.25-micron process generation has suddenly become "no man's land," McClean noted. "The 0.18- and 0.13-micron technologies will be the basis of the recovery [in 2002], and the 0.25-micron capacity will not be used for new IC designs. The idle capacity has almost become unusable forever. It won't come back," he said. In fact, the need for leading-edge technology is already filling up some pure-play foundry lines, said McClean, noting that the world's largest foundry supplier--Taiwan Semiconductor Manufacturing Co. Ltd.--has reportedly sold out of its 0.18-micron process capacity (see Nov. 2 story). The SICAS report shows older 0.4-to-0.3-micron technologies slipping to 52.5% capacity utilization in the third quarter, down from 65.8% in Q2 and 85.7% in Q1 of this year. Bipolar IC wafer fab utilization was at 65.6% in Q3, down slightly from 67.7% in Q2 and 80.1% in Q1 this year, the report said. Bipolar capacity fell 4% to 291,600 five-inch wafer starts in Q3 from 303,900 in Q2, said the SICAS report. siliconstrategies.com