July 25, 2003 – Despite tight capacity at both the 0.13-micron and 0.18-micron processes, wafer prices decreased 4.2% in 2Q03 following a 7.2% slide in 1Q, marking the eleventh consecutive quarter of declining prices, according to Semico Research.
The biggest price skids came in the 0.13-micron category, which declined 7.2% in 2Q. Prices for the 0.35-micron category fell 5.9%, after sinking 10.3% in 1Q. The average discount for volume pricing (greater than 3,000 wafers/month) was 5.7%; discounts by category varied from 2.3% for 0.13-micron to more than 7.5% for 0.25-micron 3-metal wafers.
In a related study, Semico forecasts wafer demand to experience 11% compound annual growth over the next five years, slightly higher than the historical 10-year average of 10%, driven by unit growth as well as the introduction of new materials, equipment, and technologies. Semico says its data suggests there will be enough capacity through 2004, and by 2007 the firm predicts over 37% of the silicon processed will be on 300mm wafers.
The combination of reduced capital expenditures, continued introduction of new technologies, and the closing of older fabs could result in spot shortages at the 0.13-micron- and higher processes. As capital investments have slowed in the last two years, Semico predicts fewer fabs will be available for production at the 0.13-micron levels and higher, and their capacity will be quickly used up in the event of an upswing in the market.