Electronics Production |
Foundries may be out of capacity in 4Q07
Using data compiled from current foundry company guidance for 3Q07 and IC InsightsÕ foundry shipment and capacity forecasts for 4Q07, the soon-to-be-released August Update to The McClean Report alerts IC foundry customers about a possible shortfall of capacity at the major foundries by the end of 2007 and into 2008.
IC Insights Sends alert to IC Foundry Customers. Major IC foundries may be out of capacity in 4Q07 and early 2008.
As shown below in Figure 1, the Big 4 IC foundries (i.e., TSMC, UMC, SMIC, and Chartered) are forecast to go from operating, in total, at a capacity utilization rate of only 78.5% in 1Q07 to 97.5% in 4Q07! It should also be noted that the Big 4 foundries currently hold almost three-fourths of the total worldwide pure-play foundry capacity and 99% of the ²90nm capacity.
Figure 1.
IC Insights August Update states: Given the remarkable turnaround in the Big 4s capacity utilization during the first eight months of this year, IC foundry customers are strongly encouraged to begin attempting to secure their 4Q07 and 2008 capacity needs as soon as possible.
The largest foundry in the world, TSMC, is forecast to jump from a capacity utilization rate of 83% in 1Q07 to 100% in 4Q07. UMC, the second largest pure-play foundry, is encountering an even more dramatic turnaround, going from a capacity utilization rate of only 70% in 1Q07 to an expected 4Q07 utilization rate of 95%!
SMIC, the large China-based foundry, has significantly cut its capital spending over the past three years. The $720 million in capital expenditures planned by SMIC in 2007 are less than 40% of what it spent three years earlier in 2004Ñ$1.84 billion. As a result, with its shipments starting to heat up, SMIC is also expected to have a capacity utilization rate of over 90% in 4Q07.
Chartered is forecast to be the only Big 4 foundry under 90% capacity utilization in 4Q07 (88%). However, given IC InsightsÕ outlook for good IC industry growth in 2008, the company is likely to be over the 90% rate in the first half of next year.
In total, the Big 4 foundries are forecast to register 42% more wafer shipments in 4Q07 as compared to 1Q07. In contrast, their total wafer processing capacity is expected to increase only 14% over this same timeperiod! It should be noted that total capital spending by the Big 4 in 2007 is forecast to increase only 9%, after a moderate 8% increase in 2006.
Given the expectations for IC foundry demand in 2H07 and the full-year 2008, IC Insights believes that the Big 4 foundries are currently Òbehind the curveÓ in capital spending and capacity additions. This is the main reason why IC Insights believes the Big 4 foundries will need to be among the leaders in capital spending increases in 2008.
IC Insights August Update states: Given the remarkable turnaround in the Big 4s capacity utilization during the first eight months of this year, IC foundry customers are strongly encouraged to begin attempting to secure their 4Q07 and 2008 capacity needs as soon as possible.
The largest foundry in the world, TSMC, is forecast to jump from a capacity utilization rate of 83% in 1Q07 to 100% in 4Q07. UMC, the second largest pure-play foundry, is encountering an even more dramatic turnaround, going from a capacity utilization rate of only 70% in 1Q07 to an expected 4Q07 utilization rate of 95%!
SMIC, the large China-based foundry, has significantly cut its capital spending over the past three years. The $720 million in capital expenditures planned by SMIC in 2007 are less than 40% of what it spent three years earlier in 2004Ñ$1.84 billion. As a result, with its shipments starting to heat up, SMIC is also expected to have a capacity utilization rate of over 90% in 4Q07.
Chartered is forecast to be the only Big 4 foundry under 90% capacity utilization in 4Q07 (88%). However, given IC InsightsÕ outlook for good IC industry growth in 2008, the company is likely to be over the 90% rate in the first half of next year.
In total, the Big 4 foundries are forecast to register 42% more wafer shipments in 4Q07 as compared to 1Q07. In contrast, their total wafer processing capacity is expected to increase only 14% over this same timeperiod! It should be noted that total capital spending by the Big 4 in 2007 is forecast to increase only 9%, after a moderate 8% increase in 2006.
Given the expectations for IC foundry demand in 2H07 and the full-year 2008, IC Insights believes that the Big 4 foundries are currently Òbehind the curveÓ in capital spending and capacity additions. This is the main reason why IC Insights believes the Big 4 foundries will need to be among the leaders in capital spending increases in 2008.
