Global semiconductor industry capacity utilization rate falls to the lowest level in two years

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Global semiconductor industry capacity utilization rate falls to the lowest level in two years [Copy link]

Global semiconductor industry capacity utilization rate falls to the lowest level in two years

2005-05-26 eNet Silicon Valley Power

The latest statistics released by the Netherlands Semiconductor International Capacity Statistics Association show that global semiconductor capacity utilization fell for the third consecutive quarter in the first quarter, from 86% to 84.8%, the lowest level in two years. Due to falling chip prices and increased inventory, chip manufacturers including Toshiba, Japan's second largest semiconductor manufacturer, have postponed capacity investment. Samsung Electronics expects the oversupply of memory chips for personal computers to continue until the third quarter of this year, and the oversupply will not end until the fourth quarter. Chip manufacturers produced 1.28 million 8-inch wafers per week in the first quarter of this year, an increase of 1.5% from the previous quarter, when capacity fell by 6.3%. Although the price of the most widely used computer memory has fallen by more than 40% this year, market research firm Gartner Dataquest predicts that the market is expected to rebound in the fourth quarter due to increased demand for personal computers and supply constraints. Gartner predicts that the average selling price of random access memory (DRAM) will fall by 19.3% in the second quarter compared with the first quarter, but the decline will be significantly reduced to a decline of 3.4% in the third quarter, and will stop falling and rebound by about 1.4% in the fourth quarter. More and more DRAM manufacturers, such as Samsung, Hynix Semiconductor and Micron Technology, are shifting some of their production capacity to produce NAND flash memory chips used in consumer electronics such as MP3 players and digital cameras, which should help to improve the DRAM supply surplus. Gartner said this will help the DRAM market reach a supply balance in the third quarter and a slight shortage in the fourth quarter. Currently, the spot market price of DDR-400, the most widely used memory, is $2.26. This price has fallen 44% from $4.04 at the beginning of this year. The weak DRAM prices have caused Gartner to lower its revenue forecast for the semiconductor industry. Gartner lowered its forecast for global DRAM market revenue this year from a previous growth of 2.6% to a contraction of 0.6% to $26.2 billion. However, Gartner is optimistic about the overall semiconductor market revenue this year, predicting that revenue will grow 5.9% to $232.9 billion, as demand for NAND flash memory will be stronger than expected. Despite strong demand for NAND flash memory, Gartner predicts that its average selling price will fall by 51% this year, a price drop that is even greater than the 35.1% drop in DRAM prices that it predicts. Both the DRAM and NAND markets will collapse together in 2007, and if semiconductor companies expand production capacity, prices will not be particularly good, so it will be difficult to make profits.