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Wafer demand in 2000 and 2001 for fabless companies will be more robust than earlier forcasts indicated, according to the Fabless Semiconductor Association (FSA) in the "2000 Mid-Year Update" to its annual "Wafer and Packaging Demand Survey."

The "2000 Mid-Year Update" confirmed that fabless companies plan to consume 54% more wafers in 2000 than in 1999, compared to earlier forecasts of 39%. Furthermore, the growth will continue in 2001, as the revised wafer demand forecast is now estimated to be 55% higher than in 2000. This robust growth is consistent with revenue growth estimates for the public fabless segment of 57% in 2000. This growth is spurred by new product developments in the communications, computing and consumer product markets.

The results of the "2000 Mid-Year Update" further reveal that actual wafer usage for fabless companies in the first six months of 2000 was three percent higher than that forecasted in the original 2000 Survey. In addition, respondents revised upwards their demand forecasts for the second half of 2000 by nine percent. For 2001, the group raised their forecasts by 13% from what they had forecasted in the original 2000 Survey.

Most respondents indicate significant concerns of whether the foundries will be able to supply wafers equal to the demand, and are concerned such shortfall is likely to be significant. The most common reason cited in the "2000 Mid-Year Update" for concern in missing their forecasts is the lack of adequate capacity from foundries (rather than internal issues such as the lack of a specific technology or process). Furthermore, the survey shows such constraints could cause actual wafer consumption to be significantly less than the forecasted demand.

Of the companies that increased their wafer expectations higher than that forecasted in the 2000 survey, 72% of respondents indicated that strong customer demand is the general reason for the increase in wafer demand.

Edited by Brian Hegarty
Assistant Editor, Semiconductor Online