Global pure-play semiconductor foundry revenues are set to amount to US$5.6 billion in the fourth quarter of 2009, up 53.7% from the same period in 2008, according to iSuppli. However, the research firm is concerned market conditions are not as rosy as they might seem.
The fourth quarter of 2008 marked the beginning of a sharp downturn in the global pure-play foundry business. Revenues in the quarter amounted only to US$3.7 billion, a 32.3% or US$1.7 billion plunge from US$5.4 billion in the third quarter.
"The strong year-over-year rise in pure-play foundry revenues in the fourth quarter paints a deceptively strong picture of industry growth," said Len Jelinek, director and chief analyst, semiconductor manufacturing, for iSuppli. "The reality is that the fourth quarter is bringing only a moderate expansion in revenues compared to the third quarter. Furthermore, foundries are noting a slowing of orders, indicating an underlying uncertainty in the market."
Global semiconductor foundry revenues in the fourth quarter is set to rise by a comparatively mild 6% compared to the third quarter, according to iSuppli.
Foundries are reporting weakness in their sales of semiconductor to the communications and computing segments, with the exception of netbook PCs, an area that is seeing some strength, said iSuppli. The companies also note healthy orders in the consumer segment.
Foundries also are reporting downward pricing pressure at advanced semiconductor manufacturing process nodes, such as 65nm, as more suppliers enter this segment of the market, iSuppli indicated. However, pricing for more mature semiconductor processes, such as 0.18-micron, is holding steady.
"In early 2009, when utilization rates were low, foundries were willing to cut prices on mature semiconductor processes to fill their fabs," Jelinek said. "However, with utilization having risen at the end of the year, companies no longer are willing to compromise on pricing for mature technologies."
Global pure-play semiconductor foundry utilization is set to reach 83% in the fourth quarter of 2009, up from 72% in the first quarter, according to iSuppli.
In one positive indicator for the industry, inventories held by foundries remain in a healthy state of balance, iSuppli said. This means that any increase in end demand will result in revenue increases for the foundry industry.
Source: iSuppli, compiled by Digitimes, November 2009
Article translated by Jessie Shen
