Wednesday, September 03, 2003
Not long ago, there were fears that the new and aggressive silicon foundry startups in China and other nations would create a huge capacity glut in the marketplace.
Those fears have been greatly exaggerated, due in part to a slower-than-expected production ramp from the Chinese foundry startups, according to China semiconductor analyst Joanne Itow of Semico.
"Just a few years ago some forecasters envisioned a glut of foundry capacity dumped on the market, placing foundries into the ominous position of competing in a commodity market with an overabundance of supply," Itow said in a statement. "However, as Semico predicted, those scenarios have not come to pass."
One of the fears of a potential foundry glut came from China, in which the nation's chip makers were " and still are " building fabs at an alarming rate. But on the other hand, China is not building up capacity as fast as the market had previous expected.
"While we have been closely watching capacity utilization and developments in China, it is clear that China's foundry market is developing, but not at the pace others had expected," Itow said.
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