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ST fab utilization rate flat without flash

Posted: 26 Oct 2007 ?? ?Print Version ?Bookmark and Share

Keywords:fab capacity? flash memory? utilization?

STMicroelectronics NV's fab utilization rate amounted to 86 percent in Q3, both in its 8- and 6-inch facilities in Italy, according to a company executive.

Alain Dutheil, chief operating officer and vice chairman of the corporate executive committee at ST NV, explained at an analyst conference last week that the company was "impacted by the low rates of two fabs which are producing memories" as the group is decreasing the production there.

He specified that "without these two plants, because now we need to start speaking of the company without memory, the utilization rate is 88 percent." For Q3 of 2006, ST reported fab utilization rates of 89 percent. Moreover, in a conference call with analysts in July, Carlo Bozotti, ST's president and CEO, indicated that the capacity utilization rate for the Q2 of 2007 reached 87 percent.

At that time, Bozotti declared, "It was more or less flat compared to the quarter before but here there is also the quarter before, a difference between the 6-inch and the 8-inch. The 6-inch was 88 percent and the 8-inch was 83 percent. I just want to mention that among the actions which have been taken for flash is also starting to offload some of our fab to adapt to the new reality of flash with the new core being created. What I mean by that is, for example, next quarter we will have our R2 fab being slightly unloaded because we are preparing for the transition and we have also decreased of our Singapore 8 loading, both due to the flash. The rest will be quite nicely loaded with about 89 percent utilization rate."

As for Q4 of fiscal year 2007, Dutheil said ST predicts the utilization rate will amount to 87 percent, excluding memory activities.

Questioned on the group's level of outsourcing during the Q3, Bozotti noted that it represented about 14 percent with the memory activity and 7.5 percent without the memory activity. He added, "In 2008, and at that time the company will be without the flash memory group, we will move progressively to a level of outsourcing 15 to 20 percent. At the end of next year or at the beginning of 2009, we will be at about 20 percent."

- Anne-Francoise Pele
EE Times Europe

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