Friday, February 14, 2003
The present capacity glut and low utilization rates plaguing worldwide semiconductor manufacturing are likely to persist in 2003 and 2004, due to continued fab construction and expansion in China and other Asian nations, iSuppli Corp. believes.
iSuppli is forecasting worldwide foundries will increase capacity by 34 percent in 2003. The rise will be the result of major expansions of 200mm and 300mm wafer fabs in China, Taiwan, South Korea and Singapore this year.
These expansions will exacerbate the overcapacity that already exists in front-end manufacturing, at both Integrated Device Manufacturers (IDMs) and pure-play foundries. This phenomenon will continue to restrain overall worldwide wafer manufacturing utilization rates to less than 85 percent for all technologies and feature sizes through 2003, iSuppli believes. Overcapacity will linger in 2004.
Companies expected to commence production at expanded or new fabs in China in 2003 include Grace Semiconductor, Advanced Semiconductor Manufacturing, Shanghai Belling, Advanced Device Technology (Nanker), He Jian Technology and Shougang NEC Electronics Ltd.
The new or expanded facilities in China all will use older-generation technology, i.e. 200mm wafers and production geometries of 0.18-micron and above. In contrast, IDMs and foundries expanding capacity in other parts of Asia are using 300mm wafers and 0.15-micron or smaller geometries.
The massive increase in manufacturing using second-generation technology in China in 2003 and beyond could spur a glut of trailing-edge production capacity, iSuppli believes.
Adding even more fuel to the fire, foundry service provider Chartered Semiconductor Manufacturing Ltd. this week announced it would close its Fab 1 in Singapore and sell the equipment or enter into a joint venture with a Chinese manufacturer. Fab 1, opened in 1989, uses 6-inch wafers and mainly manufactures at the 0.5-micron geometry, although the equipment in the fab is capable of 0.35-micron production.
The move is likely to increase the overcapacity in older-generation technology.
Several companies have announced that over the next three years they will build facilities in China that when fully-loaded with equipment could produce an additional 350,000 8-inch wafers per month. The technical capability of these fabs will be at feature sizes between 0.18 and 0.25 micron.
With several of the major foundries already reporting lower utilizations of their capacity at feature sizes of 0.25 micron and above, it's unclear how all this additional capacity will be consumed.
What is clear is that the overcapacity, low utilization rates and depressed pricing that has dogged semiconductor manufacturing for the last two years are likely to linger for some time to come.
By: DocMemory
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