News that goes well with AMAT up 6% today on yesterday's earnings beat.
TSMC 4Q14 production capacity almost fully booked
digitimes.com
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Taiwan Semiconductor Manufacturing Company (TSMC) has informed Taiwan-based IC design houses that its production capacity for the fourth quarter of 2014 is almost fully booked, and urged vendors which are short of production capacity to book wafer orders in advance, according to industry sources.
While the supply of wafers at TSMC is tight for the third quarter, the nearly sold-out wafer production for the fourth quarter at TSMC has placed most IC design houses in a dilemma as to whether they should queue up at TSMC for capacity.
Judging from the business cycles of the global foundry industry since 2003-2004, it is rare for fabless IC suppliers to scramble for wafer production capacity in the fourth quarter of each year, although such a scenario was seen frequently prior to 2003.
Sources familiar with TSMC indicated that 8-inch wafer production will be the most tight in the fourth quarter, followed by 12-inch fabs and then 6-inch fabs. Overall, wafer production will remain tight, resulting from a ripple effect due to TSMC landing CPU orders from Apple. Chipset suppliers which are still looking to stabilize their shipments have been advised to line up at TSMC for capacity.
Actually, a number of senior executives at local and foreign chip suppliers have experienced queues for capacity at TSMC before, as the number of foundry houses is limited and foundry capacity has not ramped up at a rapid pace. Since lead times for wafers usually extend to 4-6 months during peak business cycles, IC design houses may receive deliveries in the first half of each year for wafer orders placed in the fourth quarter of the previous year.
However, along with improvements in inventory controls at downstream vendors and OEMs, it is increasingly rare for IC design houses to line up for production capacity at wafer foundry houses during the fourth quarter.
But the fact that TSMC's wafer production capacity has been tight since the beginning of 2014, has left some Taiwan-based IC design houses wondering where the wafers are being sold, since there are no signals of a strong rebound in the end market.
But it is true that TSMC's wafers have been enjoying strong sales, as clients including Qualcomm, MediaTek, Himax Technologies, Novatek Microelectronics, Richtek Technology and Global Mixed-mode Technology have each also noted that wafer supplies are in shortage.
Some first-tier Taiwan-based IC design houses have contended that wafer production at TSMC has undergone a structural change after the ushering-in of Apple's CPU orders, which has also brought in other peripheral IC orders for iPhone, iPad and iWatch devices.
The pending launch of the next-generation iPhone and the booming 4G smartphone market in China has forced chip suppliers for Apple and non-Apple mobile devices to scramble for more wafer production capacity. |
