Manufacturers run out of silicon capacity

Manufacturers are running out of silicon capacity, due to the fact they failed to invest in this two years ago, analysts have said.

In fact, things have got so bad some companies have had to cancel their Chinese New Year holidays in a bid to catch-up.

Malcolm Penn, principal analyst at Future Horizons, told TechEye: "There's no capacity so companies are running out of processes."

"Companies have found themselves in this situation because they didn't invest enough money in this last year and the year before that.

"This was partly deliberate to ensure costs remained low, but it now means companies will be working overtime until at least next year to rectify this."

And he's right, with companies cancelling their Chinese New Year downtime to keep up. Taiwan Semiconductor Manufacturing Co (TSMC) has said that it will be cancelling its maintenance downtime completely while United Microelectronics Corp (UMC) will cut downtime to only half a day

Traditionally silicon companies give their employees two to three days of holiday over the New Year, but this year they are becoming stringent as contracts have submerged production lines at the two chipmakers’ 300mm wafer fabs. These account for half of TSMC's revenue.

Maintenance downtime for half of its 200mm wafer fabs will also be postponed until the end of the holidays while the other half have been maintained.