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Specialty foundries seek new growth opportunities

Posted: 08 Oct 2009 ?? ?Print Version ?Bookmark and Share

Keywords:foundry? IC recovery? CMOS? image sensor?

Foundry rebound underway
"Q1 was awful," said Kirk Peterson, North American foundry manager for On Semiconductor. "Things are looking better. We're seeing new design start activity."

"We're very busy," said Rainer Kasmaier, director of technical marketing and project management at German foundry startup Landshut Silicon Foundry GmbH or sometimes known as L-Foundry. "Since the summer, we've seen a lot more activity."

Others are cautiously optimistic about the market. Right now, there is "limited visibility" in the overall foundry market, said Mark Miller, VP of business development for North America at Germany's X-Fab Semiconductor Foundries.

X-Fab, one of the few publicly-held, specialty foundry vendors, typifies the state of the business. X-Fab recently reported sales of $84.4 million for the first six months of the current fiscal year, down 62.7 percent from a year ago. Sales in the second quarter amounted to $43.4 million, a decline of 59.5 percent compared to the same period last year and an increase of 5.7 percent compared to the first quarter of the current fiscal year.

Losses before interest and taxes (EBIT) as of June 30, were $34.3 million. This compares to EBIT net of $23.4 million for the first six months of 2008. X-Fab recorded a second-quarter EBIT loss of $13.4 million, compared to a profit $6.6 million in the second quarter of 2008.

"The worst is behind us. The upward trend has stabilized, so we now anticipate second-half sales growth of approximately 40 percent compared to the first half of 2009," said Hans-Jurgen Straub, CEO of the X-Fab, in a recent statement.

After a projected decline of 16 percent to $17.3 billion in 2009, revenue from pure-play foundries is expected to increase by 25 percent in 2010, reaching $21.7 billion, according to the latest forecast from market research firm IC Insights Inc. Total foundry sales, including sales from integrated device manufacturers that allocate a portion of their capacity for foundry work, are projected to be $25.5 billion in 2010, according to the forecast.

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