Foundry downturn hits bottom, but fab utilization rates continue to fall

The utilization rates among fabs in the silicon foundry business are beginning to flatten out after a period of record drops in the industry, said James Hines, who tracks the industry for Dataquest Inc. of San Jose.

The average fab utilization rates in the foundry business were about 100% or more late last year. But that number fell to 71% in the first quarter of this year, to 48% in the second period, Hines said. The figure includes both pure-play foundries and integrated device manufacturers (IDMs).

In the third quarter of this year, the average fab utilization rate in the foundry business is projected to fall to 46%, Hines said. "It could go lower," Hines said, "but we're beginning to see the bottom in the foundry business."

At last count, however, Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC), the world's largest foundry, was reportedly down to about 40% in terms of overall fab utilization rates, according to sources in the industry.

Taiwan's United Microelectronics Corp. (UMC), the second largest foundry, is reportedly running at about 35%, sources said. And Singapore's Chartered Semiconductor Manufacturing Pte. Ltd., the third largest provider, is down to 30%, after deciding to close one of its fabs for a week or two, said sources in the region.