Tight capacity forces improved productivity

USA: Semiconductor units are expected to increase by 24 percent in 2010, while wafer demand is only going to increase by 17 percent. Why is wafer demand growing at a slower rate?

One reason is that the industry is in a tight capacity situation. Manufacturers find ways to be more efficient when they have to. Certain product categories are tighter than others.Source: Semico Research, USA.

Memory is one of those categories that when capacity is squeezed manufacturers find ways to improve yields and/or switch to higher densities. DRAM units are expected to grow by 17 percent, while wafer demand will only grow by 15 percent. NAND units are expected to grow by almost 16 percent, while wafer demand will only increase by 13.5 percent.

The biggest area for silicon savings is in the communication Micro Logic categories. Units are expected to grow by almost 27 percent, while silicon demand will only grow by 19 percent. More efficient production on 45nm/40nm is one of the main reasons for the more efficient use of silicon.

In addition to the tight capacity situation, silicon usage continues to be influenced by the transition to more advanced technology. Intel introduced 32nm production in late 2009. In 2009, almost 28 percent of all silicon was processed on 65nm technology or finer. By 2014, over 40 percent of all wafers will require technologies in that category.Source: Semico Research, USA.

More detailed wafer demand forecast information can be found in Semico Research’s latest release Wafer Demand Summary and Assumptions Q1’10. In addition, there is a four-page summary write-up providing the major assumptions behind the forecast and changes from the previous quarter.