TSMC gives mature processes a boost as capacity crunch looms
By Anthony Cataldo
EE Times
04/14/2004, 12:55 AM ET
San Jose, Calif.--Straining to meet demand for its chip manufacturing service, TSMC said it is moving to expand its offering of older process technology capacity as orders for 0.13-micron production capacity heats up.
The move to widen its offering of more mature process technologies, starting at 0.18-micron and above, comes as company sees the first signs of a capacity crunch. The leading chip foundry company said it is shipping 40 percent more wafers than it was a year ago, when it was using only 60 percent of its capacity. Still, that isn't enough to sate customer demand in the short term.
"Our capacity is somewhat short of customer requirements, but not by much," said Kenneth Kin, senior vice president of marketing and sales.
The company has allocated $2 billion in capital spending for 2004, a $800 million increase over 2003. Even so, there won't be any meaningful increase in production capacity until next year, said Genda Hu, vice president of marketing for TSMC.
"Even if we do anything it will be too late for this year," he said.
Past semiconductor industry upturns were marked by high demand for advanced process technology while the older lines hit a plateau. For this upturn, however, TSMC says demand is strong across the board. "We have seen the demand for mature technologies continue to increase at a very fast rate," Kin said.
One reason is that fewer companies are opting to use the most advanced process technologies as the cost of non-recurring engineering fees and other manufacturing costs keep rising.
"The adoption rate for new technology by customers is slowing down," Hu said. "In order to sustain our growth we can't rely on advanced technology alone."
Moreover, not all systems need the most advanced design rules. While processors, cellular base band chips and graphics chips are being designed with feature sizes of 0.13-micron or lower, there's a growing list of embedded systems and consumer electronic equipment that need higher power operation.
Among them are flat panel display controllers, CMOS image sensors, microcontrollers and RFID chips. As a result, TSMC is in the midst of a "lateral expansion of the more mature technology" to better serve these mainstream application areas, Kin said.
Camera-equipped cellular phones and digital cameras are examples of markets TSMC wants to better serve by expanding its 0.18-micron capacity. The company plans to introduce a higher-performance version of its CMOS sensor technology for the 0.18-micron node by the end of the year.
Earlier this year the company added an embedded flash memory module to its 0.18-micron process based on a split-gate technology. The nonvolatile memory module is now being qualified, and should be production ready by the end of this quarter, said Ping Yang, vice president of research and development at TSMC.
Also on the company's non-volatile memory agenda are new 0.18- and 0.25-micron modules based on a pure logic process. Using this scheme, TSMC can embed small amounts of non-volatile memory without using extra mask layers, Hu said. The modules are slated to appear in late 2004 and early 2005.
Targeting the LCD market, the company plans to introduce two LDMOS modules based on 0.18- and 1.0 micron design rules. An 0.18-micron DDD-CMOS module is on track to appear by the first half of 2006.
Despite its renewed emphasis on mature process technologies, the company is also reporting a substantive increase in demand for 0.13-micron process technology. Many early 0.13-micron development efforts were delayed because the industry was unprepared for some of the new materials that were introduced at that node, such as copper and low-k dielectrics.
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