TSMC Ramping Aggressive CPU Process Push
David Lammers, News Editor -- Semiconductor International, 4/29/2008 9:10:00 AM
 |
In a conference call today following the release of TSMC's first quarter results, Tsai said strong sales of chips for digital and high-definition televisions and game consoles helped spur TSMC’s first quarter revenues in the consumer IC sector, an area that many analysts have said would be vulnerable to the weak U.S. economy. He also said the PC market is looking fairly strong for this year, with 12% unit growth in 2008.
“In general, the business outlook looks positive,” Tsai said, estimating that the overall semiconductor industry will grow 4-6% this year and will do better than that if the memory sector is excluded.
Tsai said TSMC will de-emphasize production of standalone flash memory chips while continuing to develop its embedded flash offerings. Also, TSMC is developing a plan for how it will serve the growing market for light-emitting diodes (LEDs) used in solid-state lighting. Tsai said, “We are seriously evaluating, but have not made a decision yet about how we will approach that opportunity.”
Tsai said TSMC is “hiring aggressively” to build up its most advanced process technology platform, aimed at standalone processor production. The CPU process will result in “significant” revenue growth over the next few years, he said.
“Before, our process technology was not ready for CPU production. While we may not be as good as Intel yet, our technology is good enough to serve a certain segment of the CPU market. Our capability there is a much stronger platform than that of our competitors. The standalone CPU business will take some time. In 2009, we will see some revenues, but it will blossom after that,” Tsai said.
Embedded CPUs will also play a stronger role. TSMC is developing hard-wired versions of the two ARM Ltd. (Cambridge, UK) embedded processors to offer its system-on-a-chip (SoC) customers.
This year, Sun Microsystems Inc. (Santa Clara, Calif.) decided to move its 45 nm and beyond CPU production to TSMC, although long-time Sun foundry Texas Instruments Inc. (TI, Dallas) will continue to provide test and packaging services to Sun. The Sun foundry business was valued at ~$400M per year by TI. Also, analysts have suggested that Advanced Micro Devices Inc. (AMD, Sunnyvale, Calif.) will shift more of its graphics-intensive processor production to TSMC.
Front-Loading 1H Capex
Lora Ho, CFO, said TSMC plans to stick with its plan to invest roughly 20% of its revenues on average in additional capacity over the next five years. This year, TSMC pulled in equipment purchases in the first two quarters to meet strong customer demand, but will spend $1.8B for 2008 overall as originally planned. By front-loading capacity expansions in the first half, with ~60% of the annual budget spent in the first two quarters, Ho said spending will decline in the second half.
Tsai said TSMC plans to be “quite aggressive on 40 nm in the first half of next year.” Qualcomm Inc. (San Diego) recently said it plans to begin 45 nm cell phone chipset production at TSMC starting in June, and Altera Corp. (San Jose) recently demonstrated a 10 Gb/sec Serdes transceiver on a FPGA using TSMC's 40 nm process. However, Tsai said 45/40 nm production will be “quite small” this year and only reach significant volumes next year. Also, TSMC is estimating that 65 nm production will account for 20% of revenues for the entire year. In the first quarter, 65 nm revenues were ~15% of the total. Production of 90 nm chips will remain steady, Tsai said.
TSMC is also moving to the 32 nm generation, with the 32 nm low-power process expected to ready for customers by the end of this year, said J.C. Huang, manager of platform marketing at the advanced technology division. Huang said a “second phase” of 32 nm technology will involve adding a high-k/metal gate technology for the 32 nm high-performance process aimed at CPU production.
 |
| TSMC claims that its 40 nm process technology is ahead of the International Technology Roadmap for Semiconductors (ITRS). |
Also, the 40 nm general purpose process will move into early “risk” production at the end of this year, with the addition of a strained silicon module using deposited silicon germanium for the PMOS transistors.
“We just got the reliability data for the 1 V 40G process, and it shows a 60% speed improvement” over the 65 nm G process, he said, adding that TSMC will not offer a 45G process but will go directly to the 40G process.
“TSMC is on the leading edge of the ITRS. 40 nm is our mainstream node, while other foundries will stay at 45,” Huang said.
