SAN JOSE -- The chip industry's IC wafer fab utilization rate plunged to 72.7% of installed capacity in the second quarter from 83.8% in Q1 of this year, according to new statistics release by the Semiconductor Industry Association here.

The Q2 fab utilization rate could be the lowest for integrated circuit plants in nearly 20 years, and it's far below the 80.5% low point in last chip downturn three years ago, said the report, which is based on the quarterly Semiconductor International Capacity Statistics (SICAS).

Not helping the utilization rate, additional wafer-processing capacity was added--not removed--during the second quarter. The world's installed IC fab capacity grew sequentially 3.6% to 1.322 million eight-inch equivalent wafers per week in Q2 compared to 1.276 million in Q1, the report said. This reverses a slight cutback in the installed capacity during Q1, which slipped about a half of a percent from 1.283 million eight-inch equivalent wafers per week.

The industry's total MOS integrated circuit capacity grew 3.7% to 1.202 million eight-inch equivalent wafers per week in Q2 compared to 1.159 million in Q1. The chip industry had 17.6% more IC processing capacity in Q2 this year than the same quarter in 2000, which was at 1.022 million eight-inch wafers per week, said the SICAS report.

Bipolar IC processing capacity also grew sequentially in Q2 to 306,200 five-inch equivalent wafers vs. 298,900 in Q1--a 2.4% increase, said the report, which was released on Tuesday. Bipolar fab utilization plummeted to 68.3% in the second quarter from 80.1% in Q1.

Metal-oxide semiconductor IC fab capacity utilization fell to 73.1% in the April-to-June quarter from 84.2% in Q1. Capacity utilization for MOS ICs was the highest on record in the third quarter of 2000 at 97.1%, according to the SICAS report.

The industry's total IC fab capacity utilization rate of 72.7% in Q2 was far below the 95% level recorded in the same quarter last year. Total IC capacity utilization (in MOS and bipolar fabs) hit a peak in the third quarter of 2000 at 96.4%. Exactly two years earlier, IC fab utilization was at its lowest point in the last chip downturn at 80.8% in Q3 of 1998, said the SICAS database.

IC manufacturers worldwide increased MOS IC capacity for processes below 0.2 micron by 32% to 295,200 eight-inch equivalent wafers per week compared to 223,500 per week in Q1, the SICAS report said. But the report shows a 15.6% drop in installed capacity for MOS ICs fabricated with 0.3-to-0.2-micron technologies--242,600 eight-inch wafers vs. 287,400 per week in the first quarter. All other MOS IC technology categories, except older processes with 0.7 and above feature sizes, grew in fab capacity during the second quarter compared to the prior three-month period.