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Intel: Foundry business getting too crowded

Posted on Sunday, February 20 2011 @ 19:34:59 CET by


Intel CEO Paul Otellini foresees big trouble for the foundry business over the next couple of years due to significant overcapacity in the sector. Otellini stated foundries make money not on the leading edge but on the trailing edge, with long running products, and added that leading-edge capacity excess, driven by Globalfoundries' expansion primarily, means pricing is going to come down.
"I think the foundry business is in big trouble over the next few years," Otellini told analysts at a conference here Thursday (Feb. 17) and accessed by EE Times by a telephone replay. He put it down to "significant overcapacity" mainly due to attempts to grab market share by new player Globalfoundries Inc. (Sunnyvale, Calif.). On Friday in Hillsboro, Oregon, Otellini said Intel would build a wafer fab in Arizona and create 4,000 U.S. jobs in 2011.

...

"Leading-edge capacity excess, driven by Globalfoundries' expansion primarily, means pricing is going to come down. As leading-edge pricing comes down, so does the trailing-edge [pricing], hollowing out the business. That means real trouble for Globalfoundries and TSMC over the next few years," Otellini predicted. He conceded that with its memory and logic operations Samsung was a different case.
More info at EE Times.


 



 

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