Manufacturing Capacity
Capacity is measured in square inches of silicon that potentially could be processed in a given time period. Capacity utilization is the ratio of actual square inches of silicon being processed as a percentage of capacity.
We define equipment productivity as square inches of silicon being processed per dollar of property, plant, and equipment (PPE). Therefore:
Because of economic and logistical factors, the percentage of capacity utilization tends to trend around a number an average number of 80%.
Therefore:
This capacity utilization measure is a leading indicator of equipment sales. REM has formulated a forecasting model that can predict the capacity utilization based on semiconductor forecasts and, in turn, can predict the turning point for equipment sales.
Call now for a consultation on this model.
