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FSA Releases Updated Results for 1998 Wafer Demand Survey; Fabless Companies' Demand for Wafers Revised to 27% Growth Survey 88% Accurate.

SAN JOSE, Calif.--(BUSINESS WIRE)--Oct. 12, 1998--The Fabless Semiconductor Association (FSA), the premiere trade organization representing fabless companies and their partners, today released updated results for its 1998 Wafer Demand Survey (1998 Survey).

The revised results show that fabless companies decreased their forecasted growth in wafer demand for 1998 to 27 percent from 44 percent.

In September, the FSA commissioned Ernst & Young LLP to poll a sample of 19 from the 63 companies that originally participated in its 1998 Survey to determine the accuracy of the original findings. This sample of 19 included 16 publicly-held companies and represented 85 percent of the 1998 forecasted wafer demand from the 1998 Survey.

The sample group of companies responding to the updated 1998 Survey revised their 1998 forecasted growth in wafer demand to 27 percent, compared to their original projection of 44 percent growth in wafer demand in April. In the 1998 Wafer Demand Survey, forecasted growth for the entire 63 original participants was 45 percent. The updated 1998 Survey results show 100 percent accuracy for the first half of 1998 and 79 percent accuracy for the second half of 1998 based on revised forecasts. For the entire year, the 1998 Survey is 88 percent accurate.

According to Ernst & Young LLP, of the 19 respondents for the first half of 1998, actual demand exceeded forecasted demand for seven companies, actual demand was less than forecasted demand for nine companies and actual demand approximately equaled forecasted demand for three companies. The major reason sited for greater than expected wafer demand for the first half of 1998 was stronger than expected customer demand. The major reason for less than expected wafer demand was an overly optimistic forecast coupled with customer delays and competitive functionality.

Each company polled was asked to give actual wafer purchases for the first six months, compared to forecasted purchases, and a revised estimate (if necessary) of the third and fourth quarters. The 1998 Survey is designed to measure wafer demand for the fabless semiconductor segment to help guide manufacturing expansion to support this segment. The Survey has become an important tool for suppliers. The Survey has been utilized and praised by foundry service providers that support fabless customers.

The FSA will publish its next Wafer Demand Survey in April 1999. The organization will host a press conference and panel discussion at that time.

There are over 200 fabless semiconductor companies in North America, 45 of which are public companies. These fabless companies subcontract the actual manufacturing of their proprietary designs. This strategy allows fabless companies to focus research and development funds primarily for the design of innovative integrated circuits.

The Fabless Semiconductor Association was formed in July 1994 by industry leaders wishing to achieve a more optimal balance between wafer demand and capacity for fabless companies. The mission of the FSA is to stimulate technology and foundry capacity by communicating the future needs of the fabless semiconductor segment in terms of quantity and technology; provide interactive forums for the mutual benefit of all FSA members; and be a strong, united voice on vital issues affecting the future growth of fabless semiconductor companies.
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Publication:Business Wire
Date:Oct 12, 1998
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