FSA Issues Updated 1998 Wafer Demand Survey

Staff -- Semiconductor International, 12/1/1998

The Fabless Semiconductor Association (FSA) (San Jose, Calif.) released updated results for its 1998 Wafer Demand Survey (1998 Survey). The results show that fabless companies decreased forecasted growth in wafer demand for 1998 from 44% to 27%. The poll was commissioned by the FSA in September and sampled 19 of the 63 companies that originally participated in its 1998 survey to determine the original findings' accuracy. The sample included 16 publicly held companies and represented 85% of the 1998 forecasted wafer demand from the 1998 Survey. The 1998 Wafer Demand Survey forecasted 45% growth for all 63 original participants. The updated survey results show 100% accuracy for the first half of 1998 and 79% accuracy for the second half, based on revised forecasts. For the entire year, the 1998 Survey is 88% accurate.

According to Ernst & Young LLP, the company commissioned by FSA to do the survey, of the 19 respondents for the first half of 1998, actual demand exceeded forecasted demand for seven companies, was less than forecasted demand for nine companies and 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 was asked to provide actual wafer purchases for the first six months and a revised estimate ­ if necessary ­ of the third and fourth quarters. The FSA will publish its next survey in April 1999.