Forecast for foundries: Blue skies ahead

Foundries experienced sales growth of more than 300% during the last nine years, most of it between 1995 and 2000 — with two-thirds of pretax income during that period coming from TSMC (today it contributes only 51%), according to VLSI. But since 2001, pretax income as a percentage of sales has risen nearly 28%, while gross margins have jumped more than 20%, thanks to a focus on reducing expenses.

Factor in an 8% increase in employment and slight dips in RD&E as a percentage of sales, and foundries are in an excellent position to enjoy strong growth during the anticipated recovery, stated VLSI.


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