Planned Capacity Additions: Is There Too Much on the Books?
G. Dan Hutcheson
Planned Capacity Additions. Is there too much on the books? That's the question every chip insider has been quietly asking recently. IR pros are being relentlessly hammered by investment analysts who have concluded it must be the case that too much capacity will come on-line in 2022, leading to an evaporation of equipment demand in the second half. Ranking positive year-over-year growth in silicon production from 1996 to 2021 shows this is not as likely as many believe. If you include 2021/22 to calculate the probability of value growth after a growth year in silicon production, the result is a 50:50 chance RPSI will be positive in the following year. Exclude 2021/22, since 22 is a forecast, and there is a 45% chance RPSI will be positive in the following year.