SEMI: Wafer shipment growth slowing back to single digits
October 11, 2007 – New forecasts from SEMI’s Silicon Manufacturers Group (SMG) project 9% growth in silicon wafer shipments this year following a 20% surge in 2006 — which suggests slowing shipments through the rest of this year.

Actual wafer shipments in 2006 were just a hair under 8000 millions of sq. in. (MSI), 20% higher than 2005. Shipments are seen growing about 9% in 2007to roughly 8700 MSI, increasingly slightly to 12% in 2008, but then slowing to 6% in both 2009 and 2010, for a CAGR of 8% for the five-year period of 2006-2010.

Note that the 9% growth forecast for all of 2007 includes previous tallies of ~12% sequential growth in both 10Q7 and 2Q07. This implies that wafer shipments will see flat growth through the second half of the year, in order to end up with 9% growth for the year.

Dan Tracy, SEMI’s senior director of industry research and statistics, explained to WaferNEWS that part of the growth in 1Q-2Q wafer shipments was due to investments and ramps in memory (particularly 300mm), also citing WSTS data showing strong shipments of advanced DRAM and NAND flash. Asked about the seeming implication that wafer shipments will slow to flat or negative growth through 2H07, he noted that SEMI doesn’t forecast quarterly wafer shipments, but said 3Q07 tallies should be published by early November.

Tracy added, though, that forecasts for our industry beyond two years out tend to increasingly lack visibility, and tend to lean toward caution — thus perhaps explaining the lower 6% growth outlooks for 2009-2010. He also pointed out that those 6% figures closely track to the SIA’s latest projection of total chip sales in those years (5.8%, 6.2%). “If you go back through history of wafer shipments, and IC units […], the average growth rate is about 9% year-on-year, so 6% is close to that historic trend,” he said.

Wafer shipments are still being driven by demand for 300mm wafers, noted Volker Braetsch, chairman of SEMI’s SMG and VP at Siltronic AG, in a statement. He projects that total silicon area shipments for 300mm wafers will surpass 200mm wafers next year, though states that 200mm wafers will still “continue to be an important part of the market.”