This shows that even Hynix will probably be forced to trim its wafer-in capacity capex and to halt 200mm production.
Guess what?
never a dull moment - amazing.
nevertheless TSMC probably got a deal.
TSMC, Hynix in talks over $1B fab sale, analyst says
Mike Clendenin
EE Times
(06/04/2007 5:40 AM EDT)
TAIPEI — Taiwan Semiconductor Manufacturing Co. may be looking to cut a deal with Hynix Semiconductor that would see the foundry spend nearly $1 billion to pick up a 200mm wafer mega-fab with a capacity of 129,000 wafers per month.
According a report from CLSA Asia-Pacific Markets, TSMC and Hynix are in talks. "We hear they are close to a deal," said CLSA analyst Ming-kai Cheng, who wrote the research note issued Monday.
A TSMC spokesman would not comment on the report, but reiterated it is interested in buying mainstream 200mm wafer capacity.
CLSA thinks the deal will be good for both TSMC and Hynix. TSMC gets an immediate 12 percent boost in capacity and Hynix gets to dump off capacity that's unsuitable for commodity DRAM while at the same time filling up its coffers for future 300mm wafer expansion.
Most TSMC fabs are in Taiwan, but it does operate two overseas plants — one in Shanghai and another in the US state of Washington. "Operating risk exists but would not exceed that of operating in the U.S.," Cheng wrote.
TSMC needs to add mainstream capacity for a couple of reasons. Leading edge 300mm expansion is going well, but some companies remain stubbornly reluctant to make the transition.
"One of the issues with technology migration is that it's incrementally expensive to design into and hence rate of adoption is slowing," Cheng wrote. "While TSMC, together with its larger customers, remains at the forefront of the migration curve, growing demand for 200mm implies that TSMC is losing market share on mature platforms as it mainly focuses on leading edge capacity expansion (300mm)."
Short on mainstream capacity, TSMC has been forced to pass along orders for 180nm to its affiliate, Vanguard Semiconductor, and has even tapped Powerchip Semiconductor for CMOS sensor production. In the first quarter, TSMC derived 51 percent of its revenue from 0.15 micron and less advanced technology nodes. (0.15 and 0.18 micron accounted for 30 percent of sales.)
If the deal goes down for slightly under $1 billion, then Cheng believes TSMC's return on investment would be a respectable 30 percent. That assumes TSMC can efficiently transition the fab to logic production. Vanguard was able to do it, so Cheng believes TSMC can as well.
CLSA believes the potential deal would boost TSMC revenue and profit by 6.4 percent and 6.1 percent, respectively, based on its current 2008 estimates. |
