Demand for 55/90nm processes slows down

The utilization rate of 55nm/90nm processes at some foundries in China and Taiwan has begun to slip, possibly as a result of double-booking. The slowing orders for 90/55nm processes came at the time when the 8- and 12-inch fabs at Taiwan Semiconductor Manufacturing Company (TSMC) are operating at full capacity and the capacity of the foundry house's 28/40nm processes has been fully booked, noted the sources.

As a result, some industry sources believe that the declining capacity utilization rates of the 90/55nm processes was triggered mainly by double-booking by some IC vendors which have been concerned that the tight production schedules at foundry houses may cause short supplies of ICs in the second half of 2014.

However, while IC vendors which have made double-bookings are unlikely to reduce their orders at TSMC, they may cancel orders placed with second-tier foundry houses if sales of end-market devices fall short of expectations in the third quarter, said the sources.