Joining the bandwagon of companies talking cautiously about a recovery, start-up foundry Silterra Malaysia Sdn. Bhd. today announced record bookings for Q3 and is forecasting similar strength in Q4 and through 2004.

"It looks like the recovery is here," said Steve Della Rocchetta, executive VP of worldwide sales and marketing. "On balance we are seeing the signs of a reasonably strong upturn. These results are indicative of what is going on in the semiconductor market."

The company's Fab 1 utilization rate will reach more than 90 percent in Q4 and is expected to remain healthy during 2004, compared to a 50 percent to 55 percent rate a few months ago, Della Rocchetta said. In addition, Silterra expects more than 100 percent revenue growth in 2004 compared with 2003.

Silterra has seen increased demand by customers for manufacturing capacity in consumer audio and video, enterprise networking and cell phone handset components -- both base band and display drivers. The demand comes from customers in both Asia and North America, Della Rocchetta said. And most of new bookings are for 0.18-micron and smaller technologies.

"Many of the markets that we focus on are ones that are seeing an up tick," said Della Rocchetta. "We also believe that our display drivers for cell phones, enabling 2.5 and 3 generation color displays, are industry-leading technology. Our technology in high voltage, 21 and 32 volts, is very suitable for these displays and we are seeing tremendous momentum in that area."

Della Rocchetta said Silterra has been placing capital equipment orders and will continue to do so "incrementally and cautiously" in 2004. While a recovery seems to have arrived, he said, the potential is still out there for an oversupply downturn in 12 to 18 months.

"But I believe people will be conservative when adding capital equipment," he said. "We weren't well-served by overcapitalizing in the last recession, so the natural tendency is to be more cautious going forward."

And even if a recovery is under way, it will likely be characterized by ups and downs, according to Della Rocchetta.

"My personal opinion is that the overall trend is up, but the trend is usually not a straight line," he said. " Right now my gut says we are running a little ahead of trend line. There's seasonality to the business and a lot will depend on Christmas and Chinese New Year sell through."

The privately held Silterra, backed by the government of Malaysia, began revenue shipments at the depths of the recession in February 2001. Since then the company has grown its revenues each year, with 60 percent growth from 2001 to 2002 and 35 percent to 40 percent growth from 2002 to 2003.

By: DocMemory
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