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No double booking - yet!
29 October 2009 | By Mark Osborne | Editor's Blog
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It’s all looking good, according to iSuppli. The market research firm hailed the news that there isn’t any double booking going on at chip manufacturers and fabless companies that may dilute the strong quarterly earnings currently being posted in the industry. Global chip revenue amounted to US$58.3 billion in the third quarter, up 10.6% from US$52.8 billion in the second quarter, based on iSuppli’s preliminary forecast.“In their earnings announcements, prominent semiconductor suppliers all reported they saw no signs of the dreaded double-booking phenomenon during the third quarter,” said Carlo Ciriello, analyst, financial services, iSuppli. “This should give the semiconductor industry confidence that the magnitude of the current recovery accurately reflects real demand levels.”
That said, we haven’t yet got into the zone of fabs and foundries at full capacity and lead-times stretching, which normally triggers a double booking frenzy.
The 100% plus fab utilization rates are not that far away and little spending on new fabs has taken place in the last two years, suggesting to me that a much of 2010 could see the industry maxed-out on capacity, should demand continue to recover as is being suggested.
This time round we also have a lot of 200mm and older fabs closed, coupled to few empty 300mm fabs lurking around that could be used to buffer increased utilization rates.
The squeeze could trigger double booking, just not now!