TSMC To Cut Capital Spending By $100 Million
techweb.com
(06/30/98; 2:56 p.m. ET)
By Sandy Chen, Electronic Buyers' News
In a sign that Taiwan is finally being hit by a slowdown in the semiconductor business, Taiwan Semiconductor Manufacturing Co. (TSMC) has revised its total capital expenditures downward for this year and possibly next.
Slower-than-expected demand in the integrated circuit-wafer foundry business has prompted TSMC to lower its 1998 capital expenditures from $1.3 billion to $920 million, according to Harvey H.W. Chang, senior vice president and chief financial officer of the Hsinchu-based chip maker.
"The [foundry] market has not grow as rapidly as we had expected," Chang said . "So we've adjusted our capacity expansion plans." TSMC's total fab utilization was only 70 percent to 75 percent in the second quarter of this year, compared with a staggering 100 percent in the first quarter. Chang said third quarter fab utilization appears solid, but he did not elaborate.
TSMC originally planned to increase its annual production capacity of 8-inch wafers by 38 percent this year, from 1.19 million units in 1997, to around 1.6 million pieces in 1998.
TSMC's wafer-output plans have not drastically changed for this year, but the high-flying company is bracing for a possible slowdown in 1999. Its total capital expenditures for 1999 will be flat, somewhere in the range of $800 million to $900 million, according to a spokesman at TSMC.
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