Manufacturing Capability

By Mark Hachman  |  Posted 2004-06-10 Print this article Print

One of the linchpins of the recovery is the amount of manufacturing capacity actually being utilized. About 93 percent of the available semiconductor manufacturing capacity is being utilized, the SIA reported, while 99 percent of all leading-edge sub-16-micron capacity is being used. The danger, however, is that demand will still exceed the industrys ability to make chips, a key characteristic of previous booms.
Microprocessor sales are projected to grow by 17.7 percent to $32.3 billion in 2004 and to $37.0 billion in 2007, a compound annualized growth rate of 7.8 percent.
But the strongest growth is expected in the DRAM and flash-memory industries, which the SIA said would grow by 55.8 percent and 48.9 percent, respectively, in 2004. Total DRAM sales for the year should reach $26.0 billion, it said, while 2004 flash memory sales should reach $17.5 billion. Flash fueled a strong quarter for Advanced Micro Devices Inc. Click here to read more. But a leading chip executive said Thursday that the United States must invest in nanoelectronics in order to keep pace with Moores Law, as well as investing in research efforts funded by other countries. Researchers believe they will be physically unable to design semiconductor devices using todays silicon-based technologies 15 years or so in the future, and they say the necessary research must be done now to prepare for alternative means of manufacturing. "The price for not starting now on a massive, coordinated research and development effort in nanoelectronics could be nothing less than a loss, in just two decades, of U.S. economic and defense leadership," said John E. Kelly III, senior vice president and group executive of the IBM Technology Group, speaking at the SIA luncheon Thursday in Redwood City, Calif. According to Kelly, the United States faces a $1.5 billion shortfall in trying to keep up with the ITRS (International Technology Roadmap for Semiconductors), the measuring stick by which the industry marks its manufacturing progress. A nanoelectronics research institute, funded by government and private industry, would help get the U.S. chip industry back on track, he said. The South Korean and Japanese governments, among others, already use government-sponsored programs to fund basic semiconductor research. While U.S. agencies such as DARPA (Defense Advanced Research Projects Agency) also fund basic research, the resulting applications tend to be used by the U.S. military. Check out eWEEK.coms Infrastructure Center at for the latest news, views and analysis on servers, switches and networking protocols for the enterprise and small businesses.


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