You are here

Foundry Wafer Pricing—Second Quarter 2005

Semico Research Releases Report: Foundry Wafer Pricing—Second Quarter 2005

Phoenix, Arizona July 27, 2005 - According to the latest research released by Semico Research Corp. foundry wafer pricing in the second quarter of 2005 experienced another quarter of falling prices and declined by 6.4%. However, as Jim Feldhan, president of Semico coined in 2004, “the year of 2005 is just a bump in the road.” Most companies expect prices to stabilize over the balance of 2005. This is inline with Semico’s forecast of a better second half. Semico believes that there will be a lag, but most foundries will not be dropping prices for much longer.

During periods of soft demand, foundries have reduced prices to accommodate potential customers and increase sales. While practical in theory it has produced a band-aid effect. During the recovery period foundries could not return to pre-downturn pricing structures. Customers continued to practice what made Priceline.com famous—shop and compare. This put pressure on prices leaving foundries in an ongoing ‘catch-22.’ So what’s different about the state of foundry wafer pricing today?

While they might not have gone to a, ‘Name Your Own Price’ strategy, there are a few key factors that point toward a different approach. Number one, it is Semico’s belief that companies responded to early-warning indicators of potential overcapacity concerns quicker than during the last downturn. Inventory levels have improved, and are now only mildly out of kilter. Number two, it has been noted that there are more niche players who are customizing processes and services for their customers. This is all happening as the overall semiconductor shifts much of it focus to consumer oriented products.

“We all know that just about any product geared toward the consumer experiences pricing pressures,” said Joanne Itow, managing director of manufacturing for Semico. “But quick time to market and trendy products also creates the potential for opportunistic pricing,” she concluded.

According to the report, prices are expected to drop by 3.0% in the third quarter and only 2.3% in the fourth quarter.

This study provides current wafer prices according to line width and number of metal layers for volume orders (more than 3000 wafers per month) and for orders below 1000 WPM by process technology (0.13, 0.18-, 0.25-, and 0.35- micron line widths). Current pricing is compared with previous trends. Survey participants also estimate expected prices by quarter through 2005. Standard deviations for the survey data are included. In addition, this report includes pricing for 300mm wafers.

To purchase this report ($1500 per quarter, or $5000 per year) or for more information about, Foundry Wafer Pricing, Second Quarter 2005, Report Number: MA103-2-05, please contact Jim Feldhan at 602-997-0337 or jimf@semico.com.

To purchase Foundry Wafer Pricing, First Quarter 2005, Report Number: MA103-1-05, please contact Mr. Feldhan as well. To review more information on either report, please visit http://www.semico.com/studies/category.asp?id=13

Semico News Release July 27, 2005: Shortened Product Life Cycles: A Good Thing? Semico Research Releases Report: Foundry Wafer Pricing—Second Quarter 2005
http://semico.com/press/press.asp?id=155

Semico News Release July 25, 2005: Semico Forecasts Temperate Conditions Ahead http://www.semico.com/press/press.asp?id=154

About Semico
Semico Research Corp is a semiconductor marketing and consulting research company located in Phoenix, Arizona. Semico was founded in 1994 by a group of semiconductor industry experts. We have improved the validity of semiconductor product forecasts via technology roadmaps in end-use markets. Semico offers custom consulting, portfolio packages, individual market research studies and premier industry conferences.

www.semico.com

Twitter