Foundry customers see little impact so far on wafer supply from
Taiwan
Semiconductor Business News
(09/21/99, 05:44:54 PM EDT)
SAN JOSE -- Twenty-four hours after a devastating earthquake hit central Taiwan and threatened the island nation's vast
and highly advanced silicon foundry industry, the foundries' customers are assessing the financial impact of possible
disruptions in the production of chips and, for the most part, not expecting serious fallout.
Xilinx Inc., for instance, stated that it does not expect its financial results for the current quarter to be affected by the
quake.
Altera Corp. said it remains confident that it will continue to meet customer demand, and that its third-quarter financial
performance will not be impacted by any interruption of its supply from Taiwan Semiconductor Manufacturing Co.
(TSMC).
Adaptec Inc., which also uses TSMC as its primary source of wafers, said it believes it has adequate inventory for the
foreseeable future. Representatives from Adaptec are traveling to Hsinchu Science Park to assess the production impact
on TSMC.
TSMC has reported that none of its fabs suffered any structural damage (see today's story). UMC Group said that, based
on initial inspections, there is no apparent damage to its fab buildings or machinery, and the company's backup power
systems operated as intended.
"First of all, we are thankful to report that there were no injuries to UMC Group employees,? said Jim Kupec, president of
UMC Group (USA) in Sunnyvale, Calif. ?Also, we have contacted our customers to let them know that status of our fabs,
and are continuing to communicate with them. At this time, we anticipate that the earthquake's impact on UMC Group's
overall production for the year will be minimal, although we are still assessing the impact to September output."
Xilinx, of San Jose, said it expected little impact on next quarter's financial results because the company increased its
wafer starts last quarter due to tightening foundry capacity and Y2K inventory planning. About 60% of Xilinx's
field-programmable gate arrays and programmable logic devices are manufactured at UMC Group foundries in Taiwan.
?All wafers needed for the September quarter are already through the packaging and assembly steps,? the company said
in a statement. Xilinx said it has adequate unit inventory of all products to meet current demand. Most of the inventory is
held in die bank. In addition, the company's distributors are maintaining higher than average inventories.
"Our sympathies go out to the victims and their families of this tragedy," said Kris Chellam, Xilinx's chief financial officer.
"Thankfully, no employees of Xilinx or UMC Group were injured in the earthquake. We continue to monitor the situation
closely."
Altera said it had sufficient inventories to weather a ?temporary disruption? at TSMC. It also is continuing the production
ramp of WaferTech, a joint-venture with TSMC located in Camas, Wash., which Altera said would enable it to meet
?most, if not all, customer demand in the fourth quarter.?
"TSMC has been our leading supplier for over four years,? said Denis Berlan, chief operating officer of Altera, based in
San Jose. ?While we do not have complete information on the status of the manufacturing lines at this point in time, our
relationship with WaferTech gives us additional flexibility and we believe that any potential shortages will be of short-term
duration and limited to selected products. In the long-term, we are absolutely confident in TSMC's ability to regain
production with minimal delay. Right now, our biggest concerns are for TSMC's employees, their families, and the
Taiwanese people."
At Adaptec, the impact of the quake will be ?minimal,? according to Bob Stephens, CEO and president of the Milpitas,
Calif., company. "We are extremely confident in the management of TSMC and believe they will be able to regain
production as swiftly as possible. Our concern goes out to the victims and families affected by this catastrophe."
Another Milpitas company, Network Peripherals Inc., a supplier of Gigabit Ethernet switches, reported that its facility in
Taipei sustained little or no structural damage. Diodes Inc., of Westlake Village, Calif., said its manufacturing subsidiary
in Hsin-Tien City, a suburb of Taipei, was not damaged in Monday's earthquake. The maker of discrete semiconductor
devices for various industries, said there would be no effect on its upcoming third-quarter revenues and earnings. |
