As wafer demand improves and Independent Device Manufacturers examine their in-house production operations, foundries could experience a wafer shortage by 2000, according to Semico Research Corp.
In a report released Monday, the Phoenix-based research firm said foundry demand for wafers is expected to grow at a compounded 21% in the next five years, considerably higher than the industrywide demand of 13%.
That number could jump to 40% if IDMs, which currently generate about 5% of their total wafer needs from foundries, rely more heavily on outside suppliers, Semico said.
If, for example, IDMs request 10% of their wafer needs from foundries by 2002, foundries may begin to see shortages as early as 2000, Semico said.
Foundry demand could also be fueled by the recent fab closings in the semiconductor industry, as well as by the foundries' ability to provide more intellectual property to customers. By strengthening its design services and intellectual property libraries, companies may bypass merchant semiconductor vendors and place orders directly with foundry operators, Semico said.