Mark LaPedus
EE Times
(12/17/2007 5:02)

SAN JOSE, Calif. -- Who are the winners and losers in the pure-play foundry and IC-assembly businesses in the fourth quarter of 2007?

Winners: TSMC Draw: Chartered Losers: ASE, SMIC, SPIL, UMC

This is based on meeting FBR's performance targets in Q4. "Recent foundry checks indicate that because of some pull-ins in wafer shipment from 1Q into 4Q, TSMC's overall wafer shipments in 4Q will increase by 5-6 percent [quarter-over-quarter], better than our early November call of 3-5 percent," said Mehdi Hosseini, an analyst with Friedman Billings Ramsey & Co. Inc. (FBR).

"However, we expect UMC and SMIC to miss and Chartered Semi to come in line with expectations," he said in a report.

Two IC-packaging and assembly providers are projected to have lackluster quarters. "What is also interesting to note is that Taiwan-based subcons ASE Inc and Siliconware could miss 4Q revenue expectations, given their reported November monthly sales," he said.

Foundries up, down

On the foundry side, Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) is projected to perform "better than expected" in Q4, according to analyst.

"In particular, we note such large [TSMC] customers as ATI/AMD, ADI, Marvel, Nvidia, and Qualcomm have all recently pulled in some shipment from 1Q into 4Q," he said. "Demand by such communication-centric customers as CSR, Freescale, Mediatek, and Texas Instruments have remained weak, with some actually cutting orders over the past several weeks."

However, the first quarter of 2008 looks weak for TSMC. "Current forecasts indicate 1Q '08 wafer shipments will be down 8 percent, worse than seasonally down 5 percent," he said.

"Current forecasts indicate wafer shipment in 1Q '08 will also be down in the range of 8 percent," he said. "One exception among UMC's customer mix is Xilinx , where our checks indicate wafer shipment growth in both 4Q '07 and 1Q '08."

Singapore's Chartered Semiconductor Manufacturing Pte. Ltd. is projected to see a decline of 3 percent in terms of sequential wafer shipments in Q4 of 2007 and minus 3-5 percent in Q1 of 2008, according to FBR. There is no change in Chartered's forecast.

China's Semiconductor Manufacturing International Corp. (SMIC) is projected to see an increase of 5-8 percent in terms of sequential wafer shipments in Q4 of 2007 and minus 10 percent in Q1 of 2008, according to FBR. There is no change in SMIC's Q1 of 2008 forecast.

There is a slight change in Q4 of 2007, where SMIC was supposed to see an increase of 5-10 percent, according to the report.

Subcons down

What about IC-assembly firms like Advanced Semiconductor Engineering Inc. (ASE) and Siliconware? "Taiwanese subcons likely to miss 4Q revenue expectations," he said. "Same customers cutting orders at foundries also reducing orders at subcons."