Predictions that under-capacity, allocation and higher prices are around the corner in the chip industry, are starting to materialise. The SICAS figures for Q3 show the foundry industry was running at 91.9% of its capacity, and 300mm wafer production was running at 96% of capacity.
Processes below 60nm were running at 93.5% of capacity in Q309. Processes from 80nm to 60nm were at 95.7% of capacity and, at 80nm - 60nm capacity utilisation was 90%.
As processes get more elderly, the capacity utilisation percentage diminished. Between 0.12 micron and 0.06 micron capacity utilisation was 84.6%; from 0.16-0.12 micron it was 86.4%; from 0.2-0.16 micron it was 82.7%.
Total capacity shrank by 1% between Q2 and Q3, but total wafer starts were up 10% in Q3 compared to Q2, says SICAS.
Quite honestly, although the systems people will moan, it's high time the IC industry made some money. Semiconductor companies have got Wall Street on their backs saying the chip industry is a low-growth industry, and semiconductor shares get marked down in consequence, while shareholders push for cuts and consolidation.
Low share prices, cuts and consolidation are especially detrimental to chip companies which depend on their new products. The ability to do extensive and basic R&D in the IC industry has already been severely curtailed. As R&D is cut, so is a chip company's ability to innovate.
But without the innovation delivered by the IC industry, how on earth does anyone think the electronics industry, and society at large, is going to move forward?
So a period of prosperity for the semiconductor industry is something that should be welcomed by everyone.
Long may it last.
Amen to that ... a couple of '20+ percent' growth years is now as near a certainty as you get in this business. It will do wonders for the industry morale and stuff another well derseved finger at Wall Street's 'insights and analyses'. Double Amen to that too!
I agree David. Your comments about Wall street are also spot on. If I could make a wish for this industry it would be that the semi companies are majority shareholders in their businesses. This industry has to work on a 3 year plus horizon - not Wall streets quarterly goose step.
Thanks Jason. I share your wish. Linear Tech bought back a third of its shares a few years back and if they did that again, could take the company private and out of the reach of Wall Street influence. If the interests of the stock market and industry clash then, in my view, the interests of industry must prevail, because industry is more important to the world than the stock market. Ultimately the stock market is in existence to raise money for industry. If the stock market doesn't do that, we need something else that will.