Strategic Marketing Associates Reports Value of New Fab Construction Projects Started in First Half of 2003 Are Higher Than All of 2002.

Business Editors/High-Tech Writers

SANTA CRUZ, Calif.--(BUSINESS WIRE)--Aug. 4, 2003

Majority of Fabs Under Construction This Year Will be 300 mm

The most recent edition of The Quarterly Spot Report on Semiconductor Fab Projects, released today from Strategic Marketing Associates (SMA), shows the value of new fab projects started this year will be more than $21 billion when fully ramped, twice as much as last year's level. The report lists 13 more fabs that could start or restart construction in the next four quarters. In addition, 20 new fabs will also come online in the next four quarters with a capacity, when fully ramped, of one-half million equivalent 8-inch wafers a month.

The report expects that 17 new fabs will start or restart construction in 2003 alone. As many as 12 of these will be 300 mm fabs. The report cites that although future foundry capacity will be a mix of 300 mm and smaller wafers, more than one half will be 300 mm. While there will be a place in the future for foundries using smaller wafers, no such place exists for DRAM fabs. All future DRAM fabs will be 300 mm. Of the ten major DRAM companies, six already have 300 mm fabs online. Only Micron and Winbond have not announced plans for a 300 mm production fab.

"Micron, the only U.S. supplier of DRAMs, has a pilot line," said George Burns, president of Strategic Marketing Associates, a market research firm specializing in fab information. "And even though they haven't said it, I think they will start work on a production fab, either in Virginia or Utah within a year."

Burns sees growth in new fab activity and capital spending, but restrained growth. The report's ongoing capital spending survey indicates chip makers will increase spending by 11 percent this year to $31 billion, up from $28 billion last year.

Data also confirms the continuing growth of Asia Pacific. For the first time, Asia Pacific will outspend all other regions of the world. "From now on, Asia Pacific is going to be the champ," thinks Burns. "Not only in terms of spending, but also where the fabs are being built." Spending by U.S. companies will be down for the third year in a row, down 56 percent from its peak of $21 billion in 2000. "Outsourcing has a lot to do with this," Burns says. "It's also one of the main reasons why Asia Pacific is the new manufacturing center of the industry."

The Spot Report

The Quarterly Spot Report on Semiconductor Fab Projects, reviews, lists, and analyzes all the new fab announcements and groundbreakings, as well as fab upgrades and expansions during the past quarter. The Spot Report also looks to the future and provides a listing of new fab projects beginning in the next 12 months, including upgrades and expansions. It also provides a capital spending forecast, highlights 300mm fab activity, new foundry and DRAM capacity, and regional shifts in manufacturing capacity. It is available by subscription for $600 per year via email. For more information visit www.scfab.com.

About Strategic Marketing Associates

Strategic Marketing Associates is the semiconductor industry's leading market research company focused solely on the wafer fab. Since 1992, SMA has provided its subscribers with comprehensive and accurate data about all aspects of the fab business plus insight on key trends. SMA provides a suite of information products covering wafer fabrication costs, fab capacity, technology, products, locations and closure plans. Additionally, Strategic Marketing Associates has compiled the industry's most comprehensive and advanced fab database, World Fab Watch, that features a complete listing of the world's fabs and their characteristics. SMA reports are widely read by semiconductor manufacturers, equipment and materials companies, fab construction companies and financial analysts. For more information visit www.scfab.com.