Strong Demand Causes TSMC's 28nm Output to Exceed Projection

Taipei, Dec. 3, 2012 (CENS)--Taiwan Semiconductor Manufacturing Co. (TSMC) cranked out 52,000 300mm wafers processed using 28nm process technology at its Fab 15 factory in central Taiwan in November 2012, surpassing planned 50,000 wafers, and the output is likely to reach 75,000-80,000 wafers in December, more than planned 68,000 wafers.

TSMC began volume production of 28nm chips in October, 2010, with initial output of around 1,000 wafers a month. Fab 15 is the foundry giant's pivotal production site for 28nm chips, turning out over 10,000 wafers using the process in the second quarter this year. The monthly output of 52,000 wafers marked the unprecedented volume production speed at the company's giga-size foundry factories.

Industry executives estimated sales of 28nm process service would account for 30% of the company's revenue in 2013 and its gross margin from the sales would stand above 40% as well in the meantime. The results, once achieved, suggest the company will remain the world's No.1 supplier of 28nm foundry service.

The company ended the third quarter of 2012 with 13%, or NT$18.5 billion (US$637 million), of revenue from 28nm process, which is expected to rise to over 20% in the fourth quarter.

Although the company's revenue for the fourth quarter is estimated to drop 7.3-8.7% from the third quarter, to NT$129-131 billion (US$4.4-4.5 billion at US$1:NT$29), its consolidated revenue for October hit a record high of NT$49.9 billion (US$1.7 billion), up 15.2% from a month earlier.

Some foreign institutional investors estimated the company's revenue for the fourth quarter to surpass NT$131 billion in light of brisk orders for the company's 28nm process foundry service. Chips for smartphones and tablet PCs remain the major driver behind demand for 28nm process foundry.

TSMC will begin tooling the phase 4 and phase 5 production modules of Fab 15 sometime in December and put the two modules into volume production in the second quarter of 2013. Employees at the factory will increase to 2,400 in 2013 from current 1,800. This fab will take TSMC a total of NT$300 billion (US$10.3 billion) to complete in 2015.

TSMC is estimated to begin pilot production of chips at 20nm nodes in the second half of 2013 and volume production of the chips in 2014.