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IC manufacturing utilisation hike in Q2

Posted: 11 May 2009     Print Version  Bookmark and Share

Keywords:IC manufacturing  utilisation rate  semiconductor  fab tools 

The action of shutting down some fab tools has two significant impacts on the metrics used to measure semiconductor manufacturing operations. The first result is that capacity decreases, although the tools that have been shut down have not been physically removed from the fab floor. The second impact is that factory utilisation rises.

Semiconductor manufacturing downturn and recovery

This represents the third stage of the recovery, which is the current state of the global chip manufacturing industry.

In phase four, as the semiconductor manufacturing industry recovers, chipmakers actually can achieve better margins than before the downturn. This is accomplished through a judicious use of working overtime by the existing staff to cover any short-term shortfall in capacity. During this period, fab utilisation will continue to rise.

iSuppli expects the semiconductor industry to enter this fourth stage in June 2009.

Eventually, as chipmakers see the return of backlog that can be used to generate an accurate manufacturing forecast, they will release their suspended manufacturing assets. This has the effect of increasing capacity with minimal actual capital investments. Although chipmakers will restart the tool depreciation as the tools return to service, a portion of the depreciation has already been taken.

This is stage five, when capacity utilisation recovers to levels seen before the downturn. iSuppli expects stage five to commence around the end of Q2 10.

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