Sales of machines to make semiconductors will rise much faster in 2006 than initially forecast due to strong demand for electronic goods such as mobile phones, according to U.

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S. chip market research group VLSI Research. Worldwide sales of chipmaking equipment are expected to rise to $62.8 billion in 2006, up 23.2 percent from 2005, against initial forecasts for a 13 percent increase.
The increase in the forecast was prompted by strong first-quarter equipment sales of $15 billion, 20 percent more than the prior quarter and 9.5 percent above the year-ago period. VLSI Research warned that the surge in investment may be too much and that a correction loomed in the second half of the year.
The ratio of investment in equipment to sales of chips is running at 31 percent this year. This is well above the healthy investment ratio of 20 percent, VLSI Research said.

Working with STMicroelectronics to equip a 300-mm wafer fab in Catania, Italy, is one of three options for adding manufacturing capacity under consideration by Freescale Semiconductor, according to Denis Griot, the company's senior vice president.

Earlier this week, Carlo Bozotti, ST's president and chief executive officer, said the chip maker was looking for partners to share the cost of equipping the fab. Griot confirmed to Europelectronics that Freescale is considering such an investment.

Griot, who also manages Freescale's operations in Europe, the Middle East and Africa, was the key negotiator when Freescale (then Motorola Semiconductor) joined the Crolles 2 chip project in which it cooperates with ST and Philips Semiconductor on process and IP development.

Griot spoke at the Europartners Distribution Forum in Paris. When asked by EE Times UK if investing in Catania was under consideration, Griot said, "I think a lot of the Crolle technology will migrate to proprietary fabs in addition to TSMC, as it does today. And of course we are considering the scenario you mentioned. But there are other scenarios which are more in Asia but also in North America."
Griot added, "The final decision has definitely not been taken and this is just one scenario among three we are considering."