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TSMC to Build 3rd 300mm Wafer Fab

Taipei, April 29, 2010 (CENS)--In anticipation of a robust demand that will further strain the already short capacities at the company's 300-mm wafer fabs in forthcoming quarters, Taiwan Semiconductor Manufacturing Co. (TSMC), plans to build a huge 300-mm wafer fab in the Central Taiwan Science Park.

Morris Chang, chairman and chief executive of the world's No.1 pure foundry supplier, recently pointed out that the company's supply of advanced process technologies, namely 0.13-micron process and below, is already 30-40% short of demand. The shortage, he added, would be furthered as many integrated device manufacturers (IDMs) have begun increasing outsource to pure manufacturers.

Chang estimated the planned factory, designed to process chips using 28-nanometer process, would cost the company around NT$100 billion (US$3.1 billion at US$1:NT$32) in investment, taking up a huge portion of the company's planned US$4.8 billion in annual investment expenditure for 2010. Construction is set to start in the middle of this year.

The capital will be funneled into expansions at operating factories in addition to the planned factory. According to the company's project, once these expansions are completed the company's total output will increase to 11.24 million 200-mm equivalent of wafers by the end of this year, with output using advanced process technologies at its 300-mm fabs estimated to increase by 35% to account for half of the company's total wafer revenues.

According to Chang, once the expansions at its two operating 300-mm fabs are completed, the two factories will be able to turn out a total of 100,000 wafers a month. The expansions also include deploying 40nm process.

Chang pointed out that IDMs contributed 15.7% of the company's annual compound growth rate (ACGR) between 2003 and 2008. The contribution percentage nearly halved in 2008 as a result of weak demands amid global financial crisis. However, a string of factory closures among IDMs last year will prompt manufacturers to farm out more production to pure manufacturers, Chang analyzed.

Flooding contracts became the grounds behind Chang's recent forecast that global revenue of the chip-foundry industry will seen an annual growth of 36% this year, higher than the 22% increase forecast for the semiconductor industry as a whole.

(by Ken Liu)
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