IC manufacturing utilization dropped in Q1

Peter Clarke and Mark LaPedus
(05/24/2005 6:32 AM EDT)

  LONDON — Amid a slowdown in the silicon foundry industry, the utilization rate of the world's wafer fabs fell for a third sequential quarter in the first quarter of 2005, according to the Semiconductor International Capacity Statistics (SICAS) group.

According to Reuters the utilization rate dropped to 84.8 percent from 86.0 percent in the fourth quarter of 2004, to hit the lowest level in two years.

Total MOS capacity utilization declined to 85.6 percent in the first quarter of 2005 from 86.5 percent in the fourth quarter of 2004, said John Lau, an analyst with Jefferies & Co. (New York), in a report that cites the SICAS figures.

"These figures are consistent with the semiconductor inventory depletion evident throughout Q4'04 and Q1'05," Lau said.

Total 300-mm utilization was 92.8 percent in the first quarter of 2005, compared to 87.3 percent in the fourth quarter of 2004, he said. Capacity by 200-mm production increased 2.0 percent quarter-over-quarter.

While total MOS capacity utilization looks to have bottomed, foundry capacity remains depressed amid the downturn in the overall semiconductor industry. Foundry utilization decreased to 75.2 in the first quarter of 2005, from 81.5 percent in the fourth quarter of 2004, he said.

"Foundry utilization rates tend to be more volatile and sensitive to the overall semiconductor demand and supply equilibrium," he said. "The Q1 decline is consistent with recent major foundries' announcements of lower capacity utilization in the March quarter, but the expected utilization rates for the major foundries are expected to diverge for the June quarter."

Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) anticipates a rise in utilization to 80 percent in the June quarter, while United Microelectronics Corp. (UMC) expects a drop from 72 percent in the fourth quarter of 2004 to 63 percent in the first quarter of 2005, he said.

China's Semiconductor Manufacturing International Corp. (SMIC) expects utilization to increase to 87 percent in Q1 from 85 percent in Q4.