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Forget how bad the semiconductor industry is at the moment and look at the chart below from Gartner. It shows that the market research firm is only expecting (2) new 300mm fabs will start production in 2009, based on current projections.

But who is starting construction in what is expected to be one of the worst downturns the industry has experienced with two year’s of back-to-back negative growth?

It is not a trick question at all. I believe that the one of the companies planning to start construction could yet delay construction in 2009, resulting in only (1) 300mm fab actually breaking ground.

If you guess right, (please post your answers in the comment box below) I am sure you will agree that being bad is one thing but the industry sure can get bizarre at the same time. Made more so when you identify that one of the 300mm fabs owners starting production in 2009, is also potentially the only manufacturer building a new 300mm fab next year!

I hope to reveal my two fab picks later this week and give my explanation on this bizarre situation. If you have received the latest edition of Semiconductor Fabtech in the post recently, the ‘300mm activity report’ should give the game away, but we have yet to post the report online so more can play the game.

Update: 2nd Jan, 2009 

The answer

Perhaps I should have made this harder, but it looks like The Foundry Company could be the only chip manufacturer to start production at a ‘new’ (Fab 38) 300mm fab as well as start construction of another (Fab 4X) in 2009.

Gartner doesn’t expect Toshiba to start construction of Fab 5 in 2009 as the NAND flash market struggles with 60% ASP declines etc… and other new 300mm fabs are still on hold as we start 2009.

Not even Intel is expected to tool install at its first 300mm fab in China until 2010, though that may mean Intel is planning for another fab to start construction later in the year.

Should the memory markets improve sufficiently in the second half of 09, we could see the likes of IMFT start production at its fab in Singapore but again, there are many uncertainties regarding IMFT, especially over cash reserves that have fallen to just US$1 billion recently.

Gartner’s David Christensen told me that that Renesas Technology will go ahead with production at its Naka2 (N3-1F) Ibaraki, 300mm fab this year, though I haven’t had confirmation from Renesas as yet.

So there remains a real chance that The Foundry Company could indeed be the only manufacturer actually spending on new fabs in 2009. Although this seems bizarre, given the current climate, many a market analyst would note that to capitalise on the next upturn, having the capacity in place is a key prerequisite.