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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Cary Salsberg who wrote (62356)	3/26/2002 1:58:30 PM
From: Gottfried	Respond to of 70976

Cary, from the SEMI site - a forecast, made in December... Fab utilization is clearly tied to industry profitability and consequently to spending. Following a steep decline in utilization rates through the first half of 2001, the lead-time required to switch off spending and halt fab projects combined to create a nine to twelve months delay in the peak of fab capacity. Industry average utilization reached a low of 58 percent in the third quarter. An increasing utilization rate in the fourth quarter is partly based on slight demand improvement on a unit basis, but it is also the result of some fab capacity attrition. In the year 2002, the semiconductor market will see a unit driven recovery based on improving demand, while average selling prices will remain under pressure. By the fourth quarter of 2002, expect average fab utilization to reach 75 to 80 percent, representing a 30 percent increase from the third quarter of 2001. However, this level of utilization will still be too little to shake loose massive amounts of capital spending on new capacity. Growth in capital spending is expected to trail the manufacturing equipment market in 2002 and into 2003 as the industry focuses on fab upgrades and expansion of existing fabs and filling of shells. Wafer fab utilization should bottom in the third to fourth quarters of 2001 at around 60 percent. Wafer fab equipment billings are expected to drop by more than 50 percent to $4.4 billion per quarter in the fourth quarter of 2001, compared to peak of $9.3 billion in the fourth quarter of 2000. Packaging equipment billings are expected to drop roughly 70 percent to $0.6 billion per quarter in the fourth quarter of 2001, compared to a peak of $1.9 billion in the third quarter of 2000. semi.org G.