SOUTH CHINA MORNING POST: CHIP-MAKER EXPECTS CAPACITY BOOST STILL SHORT OF DEMAND
92% match; The South China Morning Post - Hong Kong ; 08-Aug-2000 12:00:00 am ; 422 words
The world's largest contract chip-maker, Taiwan Semiconductor Manufacturing Corp (TSMC), expects to boost capacity by more than 40 per cent next year with a further shift towards superior sub-0.25-micron technology.
In a meeting with institutional investors, TSMC president F.C. Tseng said the company was looking to boost its annual production capacity from 3.4 million eight-inch-equivalent wafers to 4.8 million, but still expected to be about 30 per cent over-booked.
It indicates the company remains bullish, despite investor worries of a sooner-than-expected downturn in the cyclical industry.
Last month, worldwide semiconductor stocks slumped after a Salomon Smith Barney analyst said an early end to the chip boom was imminent.
That sentiment has been echoed in Taiwan with some brokerage houses advising investors to steer clear of TSMC and its main rival United Microelectronic Corp (UMC).
TSMC has announced first-half revenue grew 114 per cent year on year, coming in at NT$65 billion (about HK$16.27 billion).
However, National Securities advised its investors to reduce holdings in TSMC, saying while the growth figures were good, they were not outstanding and much of the growth came through the company's acquisitions rather than real increases.
Company official J.H. Tzeng said prospects remained good for the foundry business during the next year.
He said the company's facilities were used to make logic chips, such as computer and communications chips, rather than commodity chips such as memory.
Much of the concern for the industry has related to a perceived downturn in demand for memory chips, especially flash, as a result of slower cellphone sales.
But one of the key facts in TSMC's favour is that much of its increased capacity will come in the form of three new 12-inch wafer fabrication plants (fabs).
The first - Fab 6 - is being built in the southern Taiwan city of Tainan and expected to come on line at the start of next year. Another 12-inch fab in Tainan, Fab 14, and a 12-inch fab in the Hsinchu Science Park, Fab 12, will come on line later in the year.
So far, few companies worldwide have committed themselves to making 12-inch fabs, putting TSMC another step ahead of its rivals. These wafers tend to have less wasted surface area than their smaller counterparts, meaning higher yields and lower costs.
Also, the company says it is moving towards having greater sub-0.25-micron wafer production, which will allow for more chips per wafer and the production of more efficient chips. About 35 per cent of the company's production is at 0.25-micron or below, and it is expected to hit 60 per cent next year.
Both moves will allow the company to increase margins and boost revenue.
Both TSMC and UMC have told customers they could expect foundry prices higher by about 10 per cent this quarter. This will have an impact on the margins of integrated-circuit design companies and put pressure on their charges |
