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To: niek who wrote (1224)	9/20/2006 11:25:52 PM
From: etchmeister	Read Replies (1) \| Respond to of 43017

SIA warns of declining U.S. production capacity But what about Philips Njmegen and Philips Eindhoven? La Pedus must been choking while writing this one up... I listened to LRCX presentation today (BofA); no change in outlook - digesting capacity additions and very rational capex spending - looks promising... Fab utilization jumps to 95 percent Mark LaPedus EE Times (09/20/2006 10:35 PM EDT) SAN JOSE, Calif. — Chip production is currently outstripping worldwide capacity, leaving some to wonder if IC makers will face a shortfall of fab capacity by year's end — or even sooner. With capacity growth lagging that of production, fab-utilization rates have hovered above 90 percent for most of the year, according to a report from VLSI Research Inc., based here. "We expect to see rates climb up to 95 percent for the remainder of 2006," according to the research firm. On average, worldwide fab-utilization rates hit 92.4 percent in Q1 and 93.3 percent in Q2, according to VLSI Research. Utilization rates are projected to climb to 95.2 percent in Q3 and 95 percent in Q4, according to the research firm. On a quarterly basis, fab capacity grew 1.7 percent in Q1 and 2.8 percent in Q2. VLSI expects quarterly growth to clock in at roughly 2.5 percent for the rest of the year. On an annual basis, chip capacity is expected to increase to 6,377 millions of square inches (MSI) of silicon, up 6 percent over 2005 VLSI Research also predicts that worldwide chip production will increase by 12 percent in 2006, compared to a mere 2.8 percent in 2005. Measured in terms of silicon consumption in MSI, chip production will reach 5,995 MSI this year, according to VLSI Research. On a quarterly basis, chip production fell close to 1 percent in the first quarter, but grew almost 4 percent in the second quarter. VLSI Research expects a steady quarterly growth through the rest of the year.