TSMC cuts back 300-mm capacity estimate for 2002
By Mike Clendenin
EE Times
(09/11/02 08:07 a.m. EST)
TAIPEI -- Taiwan Semiconductor Manufacturing Co. said Wednesday (September 11, 2002) that its efforts to push advanced process technologies to 300-mm silicon wafers have been stymied by a weak economy, forcing it to cut its estimated output capacity from 10,000 wafers per month by December 2002 to about 5,000 wafers per month.
It is the second downgrade this year, and essentially means the company is done spending on big-ticket items for 300-mm because its primary facility is already capable of between 4,000 and 5,000 wafers per month.
TSMC also confirmed it is slowing the ramp of its second 300-mm wafer plant, adding to the woes of already down-trodden equipment makers. "Demand is not as strong as expected in the 300-mm segment," a spokeswoman said, echoing previous comments by chief executive officer Morris Chang that demand for semiconductors will level off over the next 4-6 months.
The capacity cutback will affect Fab 12, in the Hsinchu Science Park. And instead of moving chip-processing gear into Fab 14 in the Tainan Science Park during the fourth quarter, TSMC will wait until the first quarter of 2003. The wafer reduction and equipment delay both result from a July decision to reel in capital spending this year from about $2.5 billion to under $2 billion.
Spluttering chip recovery
Although a spluttering chip recovery is pinching the company's 300-mm plans, it is not stalling the company's other expansion plans. Earlier this week, the company said it had applied for Taiwan government permission to build a 200-mm wafer facility in Shanghai. The company will spend about $900 million over four years, some of which will be accounted for by transferring its old equipment to the new fab. No details were given on when the fab would open.
Even though TSMC is one of the few companies in the world able to move ahead with the multi-billion dollar 300-mm wafer plants, they are still forced to step cautiously and closely track customer demand because the stakes are much higher. A typical 12-inch fab, running 20,000 wafers per month, has the potential to crank out nearly 100 million chips a month, a level of demand that even the largest companies may struggle to fulfill.
TSMC mostly makes chips based on 0.13-micron design rules at Fab 12. At the beginning of the year, the company had hoped to process 13,000 wafers per month by December. A lot has changed since then. A Who's Who of semiconductor companies, such as Intel Corp., Nvidia and TSMC itself, have gone from pinning hopes on a second-half holiday season turnaround to being increasingly doubtful that Santa Claus will save the day.
Even though some chipmakers and design houses are still predicting, or at least hoping for, growth in the third quarter, it isn't expected to be strong enough to justify earlier estimates for capacity expansion at many manufacturing firms. TSMC president Rick Tsai said a lack of visibility - only about two months, or roughly one manufacturing cycle -- is a major contributor to his company cutting its capital spending. "We will invest mostly in 300-mm and 0.13 micron; however, the pace of our 300-mm ramp will be slower than what we planned a few months earlier," Tsai told analysts several weeks ago, hinting at this week's disclosure.
The concrete wafer reduction plan was mentioned during remarks made by Harvey Chang, the company's chief financial officer, during a conference in Shanghai on Tuesday. Chang has also said TSMC's customers are worried about maintaining equivalent yields, compared to 200-mm wafers, as well as overall costs in the early stages of the 300-mm wafer introduction. The result is a wait-and-see attitude. "There is a Chinese proverb that the dumb bird will fly first. So people are waiting for others to make the move first," Chang said.
Main rival
TSMC's main rival is still moving ahead with its 300-mm wafer plans - at least for the moment. United Microelectronics Corp., the world's second largest foundry, said Wednesday that it should be able to process 10,000 wafers per month by December from its Fab 12A. "That is assuming we use up all of our allotted capex, which we have not determined," a UMC spokesman said. Currently, the fab is capable of running about 6,000 to 7,000 wafers per month. The spokesman suggested that UMC is slightly ahead of the curve because of its early 300-mm work with Hitachi Ltd. at a joint venture called Trecenti, located in Japan and now fully owned by Hitachi.
Some of the world's other large chip companies are also starting to forge ahead with 300-mm, hoping to derive the 20 percent to 30 percent savings from using larger wafers and 0.13-micron technology. Three of the six largest U.S. semiconductor companies are in the beginning of a ramp-up phase, including Texas Instruments Inc., IBM Corp. and Intel Corp., which will open its second 300-mm fab, called 11X, in October.
Motorola and Advanced Micro Devices Inc. are also both moving toward 300-mm through partnerships, while Micron Technology is making do with 200-mm manufacturing. In other parts of the world, Infineon Technologies AG, ProMOS Technologies and Powerchip Semiconductor Corp. also have 300-mm fabs, all in the early stages of the ramp-up cycle. Meanwhile, Samsung Electronics, Royal Philips Electronics, STMicroelectronics and Chartered Semiconductor Manufacturing are all doing development work on 300-mm. |
