 Gartner is now projecting capital spending for the top four foundries (TSMC, UMC, SMIC & Chartered) to be down 9.6 percent in 2008 at $6.3 billion compared to 2007. Foundry CapEx intensity however will decline by 25 percent, according to the market research firm in a weekly newsletter to clients.
Although major foundries such as TSMC and UMC actually posted strong revenues for the third quarter, Gartner believes that projections for 4Q07 will be down and growth in the first-half of 2008 will remain weak. Indeed, Gartner said that second-half spending would more than likely be restrained. Gartner attributed the CapEx reduction plans to several factors: • As competition intensified, foundries have been expected to conserve CapEx to
increase their free cashflow and boost profit returns. • Hit by a slower than anticipated ramp-up in leading-edge processes, many foundries' 300mm fabs are running at the lower-end spectrum of their companies' average utilization rates. As a result, most of the equipment that was delivered in the second half of this year was not hooked up fully, but will be used for 2008 production runs instead. • Foundries have found ways of enhancing productivity for certain critical and capital intensive equipment, and they will focus on converting capacity from slightly older generations to more advanced processes; for instance, from 0.13-micron to 65nm production.
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Fab management 
