SEMI Silicon Manufacturers Group reports Q3

Silicon shipments higher than previous quarterWorldwide silicon wafer area shipments increased by three percent during the third quarter 2003 when compared to the second quarter 2003 according to SEMI Silicon Manufacturers Group (SMG) in its quarterly analysis of the silicon wafer industry.Total silicon wafer area shipments were 1,307 million square inches during the most recent quarter, up from the 1,273 million square inches shipped during the previous quarter. The new quarterly total area shipments are 3 percent above third quarter 2002 area shipments. Millions of Square Inches ------------------- Q3 2002 ------------ Q2 2003 ------------ Q3 2003Polished ------- 957 -------------- 944 -------------- 963Epitaxial ------- 250 -------------- 270 -------------- 285Nonpolished ----- 56 --------------- 59 --------------- 59TOTAL ------- 1,264 ------------- 1,273 ----------- 1,307"Silicon wafer area shipment growth in the third quarter was lower than expected, indicating a still-fragile recovery in the semiconductor industry," said Volker Braetsch, vice president, Strategic Planning and Communication for Wacker Siltronic and chairman, SEMI SMG. "While growth is driven by 300 mm wafers, demand for smaller diameter wafers continues to decline.""Given the quarterly results, unusually strong fourth quarter shipments will be needed to achieve the ten percent growth previously forecast by silicon manufacturers. Still, this number would be roughly just half of the recorded 19 % area growth in 2002," said Braetsch. "The recent announcements of further capacity consolidation and headcount reduction at two major wafer suppliers is a clear sign that challenging business conditions remain for silicon manufacturers."Silicon wafers are the fundamental building material for semiconductors, which in turn, are vital components of virtually all electronics goods, including computers, telecommunications products, and consumer electronics. The highly engineered thin round disks are produced in various diameters (from one inch to 12 inches) and serve as the substrate material on which most semiconductor devices or "chips" are fabricated.All data cited in this release is inclusive of polished silicon wafers, including virgin test wafers, epitaxial silicon wafers, and non-polished silicon wafers shipped by the wafer manufacturers to the end-users. The Silicon Manufacturers Group acts as an independent special interest group within the SEMI structure and is open to all SEMI members involved in manufacturing polycrystalline silicon, monocrystalline silicon or silicon wafers (e.g., as cut, polished, epi, etc.) not including reclaimed wafers. SMG participant companies collectively represent more than 95 percent of the total worldwide semiconductor silicon production. The purpose of the group is to facilitate collective efforts on issues related to the silicon industry including the acquisition of market information and statistics about the silicon industry and the semiconductor market.