News Article
New wafer fab construction soars in June
35 new wafer fabs will begin to ramp the industry's monthly capacity to a new high next year forecasts Strategic Marketing Associates (SMA) in a quaterly published fab report. As most of the new fabs that began construction about two years continue to come online in 2007, they will be joined by 8 of the 11 fabs that just began construction in the June quarter.
Collectively, all of the new fabs coming online in 2007 will have the capacity to produce up to the equivalent of 2 million 200mm (8-inch) wafers. Representing about 17 percent of the industry's current total capacity, this major increase brings with it exciting growth opportunities as well as the risk of overcapacity, especially in the memory arena. "I've been tracking wafer fab metrics for more than 20 years and I've never seen a year like this one," reflected George Burns, SMA president. "Theoretically, all the new fabs coming online next year will collectively have the capacity to process up to the equivalent of more than 180 acres of silicon annually."According to the Quarterly Fab Report, the fully equipped value of the 35 new fabs is expected to reach $56 billion over the next two to three years as the new fabs continue purchasing equipment to support their respective ramps to full capacity. Up to 60 percent of the newly added capacity is expected to be allocated for memory, specifically DRAM as well as non-volatile Flash, which has become the ubiquitous memory of choice for digital cameras and an increasing number of consumer electronics products.Among the notable integrated device manufacturers (IDMs) bringing new fabs online are FlashPartners, Samsung, Hynix, IM Flash, Powerchip, ProMOS and Nanya. Burns views FlashPartners, the Toshiba-SanDisk joint venture, as the most ambitious with plans to bring three 300mm fabs online as soon as the end of 2008. "With each of these three new fabs capable of processing up to 100,000 wafers per month, FlashPartners could eclipse Samsung, currently the global wafer fab capacity leader in Flash memory."Burns reports that semiconductor foundries are also setting a new record in fab construction, noting that Taiwan-based TSMC as well as China-based SMIC and Hua Hong Electronics all plan to bring new 300mm capacity online next year. "Expect China to be a real powerhouse in foundry production," he added.SMA's Quarterly Fab Report sees equipment sales nearing an all-time high, benefiting suppliers such as Applied Materials, KLA-Tencor and Lam Research, to name few. According to Burns, total capital spending by chip companies -- which includes the value of production equipment his firm tracks -- will grow by 14 percent this year to $47.3 billion and then by 10 percent next year to $59 billion, just shy of the industry's all-time high of $61.5 billion set in 2000. "There is some risk of overcapacity in 2007, primarily due to the large amount of memory capacity coming online," he cautioned. "When news is this good, you need to worry."
