Fabs full up for 2006 as allocation looms

INFLUENTIAL market research firm Future Horizons said that it's "virtually impossible" for semiconductor firms to generate overcapacity during 2006.

The firm said in a note to its clients that "the year is already over from a 2006 capacity perspective". No amount of increased Capex can affect that with front end book to bill ration sill below 1.0, for 15 months in a row.

Lean capacity expansion times, said Future Horizons, is the "current name of the game", with IC unit growth bounding along twice as fast as net new capacity. The only bogies that can rock the trend are inventory and the economy.

The back end side of the business is also tight - and the firm reckons that even if extra wafers are produced, assembling them will be tricky. There are also other shortages including of raw polysilicon and packaging materials. µ

L'INQ
Future Horizons