More Support for Our Semiconductor Thesis
We know, we’ve told you already. But don’t just take our word for it. Fab utilization trends same as 2004, says Gartner - Semiconductor Fabtech
Gartner has noted in a weekly newsletter to clients that the current fall in wafer fab utilization rates for the third quarter of 2006 show a close correlation to events seen in 2004.The current fall - as with the fall in 2004 - was due to higher than expected output in the second quarter and a subsequent rise in inventory levels that then saw chip manufacturers reduce production in subsequent quarters to correct oversupply imbalances.
Gartner believes that we should expect a slowdown in fab capacity in 2007 as inventory is better managed giving the boost to IC sales/prices in 2008.
We have been pointing to the overcapacity threat for many months. As all of the equipment ordered recently comes on line, inventory will pile up and the manufacturers will stop ordering equipment until the inventories start working down.
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