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Downgrade in capacity utilization hits foundries

Posted: 09 Apr 2007 ?? ?Print Version ?Bookmark and Share

Keywords:SICAS semiconductor report? capacity utilization? foundry capacity utilization?

Although manufacturing capacity utilization only fell slightly for the chip making industry as a whole in the fourth quarter of 2006, foundries suffered much worse, according to numbers available from Semiconductor International Capacity Statistics (SICAS).

This indicates that the integrated device makers (IDMs)who operate their own fabs but also make use of foundriesmay be using a decline in demand, possibly due to an overhanging inventory build-up, to pull manufacturing back in-house. This could explain why the foundries have fared less well than the industry as a whole.

The overall capacity utilization declined from 88.9 percent in Q3 '06 to 86.8 percent in Q4. These numbers are marginally different to those reported by Reuters in Feb. 22.

However, a closer examination of the SICAS numbers shows that much of the decline could be attributed to foundry utilization, which fell from 91.5 percent in Q3 to 80.9 percent in Q4.

This is the lowest the foundry capacity utilization figure has been for three years with the exception of the first quarter of 2005, when the indicator dropped to 75.2 percent.

- Peter Clarke
EE Times Europe

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