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Fab utilization rates at Chartered Semiconductor could fall to 34%

30 January 2009 | By Mark Osborne | News > Cleanroom

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fab utilization rates could fall to 34% (Guidance 37%, +/- 3%)As a consequence of aggressive inventory reduction strategies by customers of Chartered Semiconductor, the foundry has guided fab utilization rates could fall to 34% (Guidance 37%, +/- 3%) in the first quarter of 2009. Utilization rates declined rapidly in the fourth quarter of 2008 as foundry customers reacted to the global slowdown in demand for semiconductors. The overall utilization rate of Chartered’s fabs declined to 59% compared to 85% in the third quarter of 2008.

“We are making progress towards achieving our target of lowering our breakeven utilization rate operationally to approximately 75 percent by fourth quarter of 2009 by optimizing product mix, improving productivity and reducing our cost base,” commented Chia Song Hwee, President & CEO of Chartered. “So far, we are on track towards achieving product mix optimization in Fab 7 and also reducing costs from our manufacturing operations.”

The foundry noted that capital spending for 2009 would be lowered to US$375 million, compared to US$576 million in 2008, down from previous guidance of US$630 million. However, approximately US$240 million of the 2009 budget had already been assigned to equipment purchases that had already been delivered or committed in 2008 for delivery in 2009.

The equipment already purchased was for the capacity ramp of 65nm and 45nm technologies at Fab7. Capacity at Fab7 is planned to reach 27,000wspm by year end. However, capacity was previously guided to reach approximately 24,500wspm by the end of 2008. Little capacity expansion is therefore expected in 2009. Total capacity at Fab7 when fully equipped is 45,000wspm.

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