It was the fabs' dramatic CAPEX reductions that truly ignited my cause for concern many quarters ago (as discussed in this MarketWatch Quarterly article) and made even more worrisome when utilization levels went below 50%. It is now with a sigh of relief that the situation is truly coming full circle (see this MarketWatch Commentary post also). Recently, fabs have been posting forward looking schedules to begin the ramp up of 40nm process technology at the end of 2009 - see this early MarketWatch Quarterly article for details on this technology. This puts 40nm on track for 2010 release and for 2011 as a main process technology.
While overall global capacity even at the 40nm-scale, at this point, is not expected to increase given the continued muted, although rebounding, consumer demand, the cost savings for the fabs by moving to 50nm and then on to 40nm are significant. DigiTimes 8/17/09 reported Micron's estimates of lowered production costs by 50% for 50nm and an additional 30% for further migration to 40nm.
Meanwhile, TSMC and UMC continue to run at 80% utilization levels again - more good news given the extreme lows just a few months ago. Both offer that order visibility is good and holding in positive territories. UMC, as reported by DigiTimes 8/13/09, has also released its move to 40nm process nodes during the end of 2009, adding that CAPEX levels are up and new equipment to further support the next generation technology is purchased.
Others in the Taiwan DRAM production arena are actively seeking funding to increase their production levels. DigiTimes 7/20/09 speculated that this is in anticipation of DRAM price rebounds during 2H09 - let's hope they're right...