Is There Hope for the US Fab Industry?

For the past two quarters analysts have been telling us that we’re on the upswing of the crash. In their World Fab Forecast, published in May, San Jose industry research firm Semi predicted that the outlook for fabs in 2010 was fair with “signs of increasing investment.” The firm projected that global market leaders with access to significant capital would be responsible for leading much of the market recovery. One major factor in this equation is Intel, who Semi predicted will make significant investments in US based fab construction. This is interesting news considering that fab investment in China, Europe and Japan are now at a 10 year low.

Whether Intel can pull the US market out of the red has yet to be seen however. The company recently announced that their manufacturing deal with TSMC is now on hiatus due to a lack of demand among consumers for more Atom based devices. In addition, Intel seems to be favoring overseas locations to US based sites for new fab construction.

Intel is set to begin production of chipsets in a new China based facility later this year, and it seems likely that Haifa will be selected as the site of the next 22nm fab considering their gains in 2009 and the closing of the Ireland facility. Two of Intel’s six US based facilities are scheduled to be closed this year according to Semi’s map of closing/closed frontend fabs, shown below. Other major players include Toshiba, who is currently contemplating the creation of a new $8.9B fab in Japan and giant TSMC, who is holding strong despite recent challenges with wafer costs and 11 straight quarterly losses.

Although it is unclear if Intel intends to make additional investments into the remaining US fabs, hopefully the current race among NAND flash manufacturers can bolster the US market. Electronics manufacturer Samsung is pushing hard to open a new Austin facility in 2010 that will be the largest chip fab in North America. Additionally, Texas Instruments is set to begin production at its new analog fab in Richardson, TX later this year, and GlobalFoundries is planning the creation of a new facility in Saratoga, NY.

Map of Closed and Closing Fabs

View Closed/Will be Closed Frontend Semiconductor Fabs in a larger map