450-mm brings confusion to supply chain

Forecasts and more forecasts
''Given the drastic cuts in semiconductor industry capital spending in 2008 and 2009 and a double-digit increase forecast for the IC market in 2010, 2011, and 2012, IC industry capacity utilization can be expected to remain relatively tight over the next couple of years,’’ warned Bill McClean, president of IC Insights, in a report. ''This in turn is forecast to lead to firming IC ASPs, extended leadtimes, and spot shortages.’’

In 2010, a 28 percent surge in wafer starts, coupled with the 6.4 percent increase in IC capacity, caused fab utilization rates to jump to 93.2 percent, up 15.5 percent over 2009, according to IC Insights. ''For 2011, (overall) IC industry capacity utilization is expected to rise to 93.8 percent before falling back slightly to 91.3 percent in 2012,’’ McClean said in the report.

Leading-edge, 300-mm capacity is expected to remain tight. ''Although in the ‘ramp-up’ stage, capacity utilization for leading-edge <40-nm devices was high in 2010 at 93.8 percent, up from the 90.3 percent figure witnessed in 2009. In 2011, leading-edge capacity utilization is expected to be very tight and register a 96.6 percent utilization rate,’’ he added.

IC Insights also forecasts a 22-point swing in semiconductor market growth (32 percent growth in 2010 and 10 percent growth in 2011), a 2-point difference for electronic system sales growth (11 percent in 2010 and 9 percent in 2011), and a  0.3-point difference in worldwide GDP growth (from 4.2 percent in 2010 to 3.9 percent in 2011).

In IC Insight’s most likely scenario, ASPs will see an increase of 2 percent in 2011, compared to 1 percent in 2010. Unit shipments are expected to grow 8 percent in 2011, down from 29 percent in 2009.

Jim Feldhan, chief executive of Semico Research Corp., said the IC market is expected to grow 8 percent in 2011, down from 31.8 percent in 2010. Capital spending is expected to grow 10 percent in 2011, with fab capacity hovering around 90 percent at the beginning of this year and cooling to 87 percent by year’s end, he said.

Dean Freeman, an analyst with Gartner Inc., sees a glut of capacity in the foundry sector in 2012,  as Globalfoundries, TSMC and Samsung are currently increasing their capital spending. The foundry business is expected to see 9.2 percent growth in 2011, down from 40.2 percent in 2010, he said. The IC market is expected to grow 4.6 percent this year, compared to 31.5 percent last year, he said.

For its own forecast, VLSI Research Inc. said the IC market will grow 8.1 percent in 2011, down from 30.9 percent in 2010.  And more importantly, 2011 is off to a better start than anticipated.

''Nearly all the chipmaking companies that have reported so far have beaten expectations. They expect Q1 growth to be above normal seasonal growth. This shows that after a weak Q4, the chip industry is roaring back thanks to a strong holiday season and an improving macroeconomic environment,’’ according to VLSI Research.

''The recent trend shows that overall inventories are tight and supply in the channel is dwindling,’’ according to VLSI Research in a report. ''NAND supplies, in particular, are very tight due to strong demand from electronics OEMs.  As a result, NAND spot prices jumped higher for the tenth straight week. DRAM is also improving. The decline for mainstream DDR3 has abated.’’