April 25, 2012 — Semiconductor wafer demand grows at a compound annual growth rate (CAGR) of about 8-9%, but capital investment in wafer fab capacity does not stick with an 8-10% investment rate every year. Semico tracks wafer demand, which is “anything but stable.”
There is almost a 50-point spread between the peak growth year (25% growth in 1995) to the worst year of decline (-23% decline in 2001). Even removing these outliers, the change in wafer demand growth rates range from -2.7% up to 24.9%, Semico shows.
Figure. Wafer demand by semiconductor product type.
The thousands of semiconductor products made in wafer fabs do not grow and contract in concert. In 2012, wafer demand for NAND flash products will increase by over 30%, while DSP wafers will experience a decline.
Semiconductor wafer manufacturing facilities produce chips on four wafer sizes, and use numerous process technologies.
Inventory overages and shortages result from market dynamics between leading companies, and customers, as well as supply chain bottlenecks, and technology and product migration.
In 2012, Intel is ramping its 22nm product lines, and foundries are filling their 32nm/28nm capacity. There is growing demand for mature capacity that can be used to manufacture micro electro mechanical systems (MEMS), image sensors, power management chips, discretes and opto electronics.
All these factors make the CAGR of 8-9% practically meaningless for capacity planning at wafer fabs, Semico concludes.
Semico’s wafer data goes back to 1991. Contact Elaine Potter at 623-792-8346 to learn more about Wafer Demand Data. Semico is a semiconductor marketing & consulting research company. Learn more at www.semico.com.