Mon, Dec 30, 2002 page10

• Chip market may recover next year

  CRYSTAL-BALL GAZING A US-based researcher reasons that a move toward more production of 12-inch wafers by manufacturers will cause demand to suddenly rise

  • By Bill Heaney / STAFF REPORTER
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  The computer-chip market will see a recovery starting in the second half of next year, Dataquest Inc reported last week.

  The driving factor will be the move to more efficient chip manufacturing plants, or fabs, which will produce 12-inch silicon wafers, the report said.

  Dataquest, a unit of Gartern Inc, is a leading US-based information-technology research company.

  "At present, 300mm [12 inch] wafer demand is estimated at approximately 200,000 wafers per month. It will grow rapidly with the reinvigoration of 300mm fab projects and is expected to reach a level of 440,000-450,000 of wafers per month in the fourth quarter of 2003," said Takashi Ogawa, principal analyst for Dataquest's semiconductor research group.

  "Coupled with the 300mm wafer demand ramp-up, total silicon demand will expand appreciably at the annualized pace of 23 percent in 2004," Ogawa said.

  Computer chips are currently cut from disks of silicon, or wafers, which measure eight inches in diameter. Advances in chip manufacturing technology have led to bigger wafers, now measuring 12 inches in diameter. Twelve-inch wafers have more than twice the usable area of industry-standard eight-inch wafers, yielding roughly 2.5 times as many chips per wafer. When the process becomes mature, this should lead to up to 40 percent savings in production costs.

  Morris Chang (張忠謀), chairman of the world's leading manufacturer of made-to-order computer chips, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), predicted a rebound in the semiconductor industry as early as the second quarter of next year.

  "I still stick to my previous forecast that the global semiconductor sector will see a recovery in the second quarter of next year," Chang said at a press event on Dec. 17.

  However both TSMC and local rival United Microelectronics Corp (UMC, 聯電) have cut back on spending for new equipment at their dedicated 12-inch fabs in the south of Taiwan.

  Both companies' existing 8-inch fabs are not fully utilized, taking up less than 60 percent of their total capacity in the fourth quarter. In these circumstances there is little pressure for a rapid shift to 12-inch manufacture.

  "Both TSMC and UMC have already started operating 12-inch fabs in Taiwan," said Alfred Ying (應宗傑), a semiconductor analyst at BNP Paribas in Taipei.

  "Next year, UMC and TSMC will expand their 12-inch fabs, but the schedule will be slowed down."

  This month TSMC produced only 5,000 12-inch wafers, and may only reach 15,000 per month by the first quarter of next year, chip analyst George Wu (吳裕良) at Primasia Securities Co said. Figures for UMC were not available at the time of going to press.

  The Taiwanese will also have to watch out for increasing competition from rivals in Japan.

  "Leading Japanese vendors, such as Elpida Memory Inc and Toshiba Corp, recently announced their intent to invest in 300mm fabs," Ogawa said. "While the regional shift of fab capacity is an irreversible mega trend at this moment, it's worth watching how 300mm fab projects of Japanese vendors will affect the regional distribution of wafer demand in the future."

  For your information

  Number crunchers

  * Twelve-inch wafer demand is estimated at approximately 200,000 wafers per month. * Dataquest Inc expects demand to reach 440,000-450,000 wafers per month in the fourth quarter of next year. * Twelve-inch wafers have more than twice the usable area of industry-standard eight-inch wafers, yielding roughly 2.5 times as many chips per wafer. * This month TSMC produced only 5,000 12-inch wafers, and may only reach 15,000 per month by the first quarter of next year.
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