World chip plants run at fastest rate in four years

World's chip factories operated at their fastest rate in almost four years during April-June, boosted by demand from cellphones and digital appliances.

The world's chip factories operated at their fastest rate in almost four years in the April-June period, boosted by demand for chips for cellphones and digital appliances such as flat-panel TVs, an industry group said on Tuesday.

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The utilisation rate was 95.4 per cent in the period, posting quarter-on-quarter growth for the sixth straight quarter, the Semiconductor International Capacity Statistics (SICAS) group said.

The rate was the highest since it hit 96.4 per cent in the third quarter of 2000. After a boom that year, the semiconductor market went into a severe downturn in 2001 and 2002.

A SICAS official said utilisation rates are likely to remain relatively high for the rest of this year before heading lower next year.

"Obviously, there is a backlog of orders out there. But at the same time, some of the products made recently at these high usage rates go into inventory. We may start seeing inventory build-up," he said.