TSMC Utilization Over 100%
By Jessica Davis -- Electronic News, 4/14/2004
Taiwan Semiconductor Manufacturing Co. has acknowledged that its current capacity is falling "somewhat short of customer requirements."
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"But not by much," said Kenneth Kin, senior VP of worldwide marketing and sales.
After a deep three-year long recession, the industry is starting to boom again. TSMC believes the semiconductor industry will grow by more than 20 percent this year.
But higher demand also means tightening supplies, and the world's largest pure play foundry said that there is no question that supply has become very tight. TSMC made the acknowledgement during a press conference in San Jose at its Technology Symposium this week.
"The big challenge in this kind of market is to try to meet customer demand," Kin told Electronic News. "Especially when you know you cannot meet 100 percent of that demand. So you must find a way to prioritize customers. And we work to find a way to increase output, squeezing the fab for more."
Foundries are reaching more than 100 percent utilization rate, said Genda Hu, VP of marketing. The rate is now closer to 105 percent.
"We can squeeze 250,000 more wafers out by adding just 5 percent capacity -- by just adding to our efficiency," he said.
Manufacturers can squeeze out those extra percentage points by extending the cycle time or working around shifts, or moving equipment around among fabs, Kin said.
"We have three fabs in close proximity to each other so we can do that," he said. "It's easier to find ways to balance the load when you are bigger. We also offer a financial incentive to operators."
Kin said that TSMC could go to 108 percent utilization rate, but that would not be sustainable for the long term. A spokesman for the company said TSMC once ran at a 117 percent utilization rate.
Because those high rates are unsustainable, TSMC, like many other foundries, is adding more capacity this year.
The company said to accommodate growing customer demand it will stick with its plans to spend $2 billion in capital expenditures during 2004. Executives wouldn't comment on whether capex could go higher still.
[Harry: Despite what is perceived as slow demand in traditional drivers of growth such as networking, this confirms the worst is over for semi equipment stocks.
What we have probably seen is a change in leadership to more consumer product demand driving the market. This is a big fundamental shift from the days where 50 percent of all semis produced went into computers. The blurring of the line between a PC and PDA is causing the shift.] |
