AMD, Intel price war takes toll on whole chip market

ALTHOUGH THE WORLDWIDE semiconductor market grew by 19 per cent in 2006, two major players are being accused of dragging down average selling prices (ASPs).

Semi analysts Future Horizons said the growth in the market this year was driven by a global economy which got stronger and stronger.

But, said principal analyst Malcolm Penn: "ASPs steadfastly refused to recover, not helped by a ruthless and ongoing AMD-Intel microprocessor price war."

Penn said that fab capacity,with more and more 12-inch (300 millimetre) wafers continues to be produced.

He said 12-inch wafers now account for 30 per cent of total production and there's a "relentless" push to 65 nanometre and 90 nanometre process technology. Utilisation rates are hovering around the 85 to 90 per cent level, said Penn.

But, he said, in the seventh decade of microelectronics, there are quite a few questions begging themselves as we approach 2007. Those include "inventory overhang" - that is to say too much stock, and the impact of private equity investment on the industry.

He also hints that industry maturity might finally have tamed the perennial cycles dogging the semi market. µ

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Future Horizons