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.

Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Donald Wennerstrom who wrote (10470)	7/7/2003 10:12:41 PM
From: Alastair McIntosh	Read Replies (1) \| Respond to of 95490

Here is a slightly less upbeat view of capacity: (From Les on the "links" thread) Idle wafer fabs belie talk of recovery . . . By Crista Souza, EE Times Jul 7, 2003 (8:15 AM) URL: siliconstrategies.com San Mateo, Calif. - A recent uptick in semiconductor unit shipments and orders placed with foundries suggests that the second half could bring a modest recovery. But manufacturers' reluctance to increase spending on additional capacity could also lead to shortages of some chips, according to a report by research firm iSuppli Corp. (El Segundo, Calif.). The report points to a first-quarter surge in shipments of discrete small-signal transistors and an expected 8 percent increase in raw wafer shipments in the second quarter over the first as signs the industry is gearing for a stronger back half for 2003. But the number of new fabrication facilities sitting idle tells a different story. "Here we sit with all those 12-inch wafer fabs, and people are not filling them up," said iSuppli analyst Len Jelinek. "Foundries, instead, are electing to convert 8-inch wafer fabs to 0.13-micron" processes. In its first-quarter financial statement, Taiwan Semiconductor Manufacturing Co. Ltd. said it would do just that by upgrading its three-year-old Fab 6 facility as opposed to installing 0.13-micron equipment in Fab 12, its new 300-mm wafer fab. Rival foundries Chartered Semiconductor Manufacturing Pte. and United Microelectronics Corp. have also delayed ramping of their 300-mm wafer fabs. IBM Microelectronics appears to be the exception, having installed equipment to support approximately half the capacity in its 300-mm fab in East Fishkill, N.Y. Chartered, under a deal struck earlier this year, will receive some of IBM's 300-mm output. "We are being watchful of overall demand for 0.13-micron and any advanced technology," said Chuck Byers, director of brand management at TSMC North America (San Jose, Calif.). "We will, however, invest prudently to meet sustained demand." UMC, which has formed fab partnerships in addition to serving as a pure-play foundry, said it is working with its customers and partners to time the installation of equipment and tool sets at its new fabs. For example, at UMCi, a joint venture 300-mm fab in Singapore, UMC moved in copper back-end processing tools first in order to supplement the copper capability of existing fabs in Taiwan. The first phase of TSMC's Fab 12 is being ramped to produce 10,000 wafers per month by year's end. So far this year there's been nothing to indicate a groundswell of demand that would warrant an accelerated fab buildout, Byers said. Semiconductor companies have begun building inventory on speculation of a third-quarter rebound, iSuppli's Jelinek said. But "there's a reluctance by manufacturers to turn on new capacity out of fear that, if they put 0.13-micron on 300-mm wafers, they won't have anything to run in the older fabs." The short-term effect, Jelinek said, is the creation of an artificial capacity shortage, primarily in nonmemory ICs, allowing wafer prices to firm or even rise. Still, in the background, foundries are installing next-generation capacity to have ready when it makes sense to throw the switch. Overall factory utilization at pure-play foundries is forecast to be 75 percent by the middle of the fourth quarter, with some companies forecasting 90 percent utilization. TSMC is expecting second-quarter utilization to be 80 percent overall, higher in smaller geometries. Copyright © 2003 CMP Media, LLC \| Privacy Statement