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Pure-play foundries to compete with IDMs

Posted: 20 Jul 2011 ?? ?Print Version ?Bookmark and Share

Keywords:pure-play foundry? integrated device makers? foundry market?

Aggressive spending and foundry services offered by integrated device makers (IDMs) such as Intel Corp. and Samsung Group will definitely affect pure-play foundries such as Taiwan Semiconductor Manufacturing Co. Ltd (TSMC) and United Microelectronics Corp. (UMC), according to Taipei Times.

The report that referenced Fitch Ratings further said the increased risk to pure-play foundries would start in late 2012. TSMC and UMC, which currently hold about 60 percent of the foundry market, would be hurt by the efforts of Intel and Samsung. Smaller foundries such as Semiconductor Manufacturing International Corp. could be even more vulnerable during a downturn, the report added.

The report went on to say that Globalfoundries Inc. is poised to become a strong foundry player and that Powerchip Technology Corp. is planning to enter the market, intensifying the competition.

The world's major IC foundries have allocated about $19.7 billion for capital expenditure in 2011up from $13.8 billion in 2010giving rise to concerns of oversupply, the report continued.

"Fitch expects capacity utilization to weaken over the next six quartersbefore substantial over-supply kicks in from 2013," the report quoted Fitch analysts as saying.

- Peter Clarke
??EE Times

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