SAN JOSE, Calif. -- The semiconductor industry's utilization of wafer fab capacity should move back above 90 percent for the first time in three years in the first quarter of 2004 and remain there throughout the year, according to a forecast from market research firm Gartner Inc.
In addition, the utilization of capacity at wafer fabs used for foundry chip manufacture should score above 90 percent one quarter earlier than the overall industry, in the fourth quarter of 2003, Gartner said in its capital spending and equipment forecast update teleconference on Tuesday (see July 8 story).
The level of 90 percent utilization is generally seen as a threshold, above which chip shortages start to appear and lead times start to lengthen.
Gartner is also predicting 2003 sales growth within the foundry part of the semiconductor business at between 21 percent and 27 percent ahead of 2002, and most likely to land at 23 percent annual growth.
To achieve that some foundries may need to demonstrate second-half performance that is much stronger than the first half.
Sales revenue for the first half of 2003 at Taiwan Semiconductor Manufacturing Co. Ltd., the foundry market leader, was 11.6 percent ahead of the same period in 2002 whereas another foundry, United Microelectronics Corp., scored a first half of 2003 28 percent ahead of the first half of 2002 (see July 9 story).
The overall chip making industry dropped below 90 percent wafer fab utilization in the first quarter of 2001, an event that roughly marked the beginning of the longest and deepest slump the industry has known. Gartner analysts see it breaking above 90 percent three years after that and after dipping as low as 60 percent in the third quarter of 2001 before completing a 'double-dip' manoeuver.
Fab utilization in the foundry subset of the overall industry has performed in a similar manner but about a quarter ahead of the overall industry, and subject to much wider swings. Foundry utilization dipped below 90 percent in the fourth quarter of 2000, experienced its first minimum of near 40 percent in the second and third quarters of 2001 and was standing at a second minimum of 60 percent as recently as the fourth quarter of 2002, according to Gartner.
Now, foundry capacity utilization is set to climb to about 95 percent by the fourth quarter of 2004, according to Gartner's presentation.