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TSMC’s spend of $5.9 billion this year has given it installed capacity of 11.3 million (eight inch equivalent) wafers.
Spending more next year – when industry growth rates slow from 30+% to single digits is not insane.
“Our view is that the market will grow 5-6% next year but the foundry industry will grow 14%,” says Maria Marced, President of TSMC Europe, “and we believe we’ll outgrow the foundry industry.”
She adds: “We expect to be fully loaded though 2011.”
TSMC has a powerful tool in its battle with aspirant rivals – the lowest break-even point for fab utilisation in the industry at 45%.
The company attributes this to the Gigafab concept of building fabs capable of making 100,000 wafers a month or more..
Of the $5.9 billion capex, 85% is going into TSMC’s three Gigafabs – Fabs 12, 14 and 15,
The latest Gigafab, Fab 15, had its ground breaking in June, and plans to start hooking up tools in Q2 2011. It will make 40nm and 28nm parts. TSMC has 71 production tape-outs on 28nm lined up for between now and 2012.
“By the second half of 2011, 28nm will be 2% of our revenues,” said Marced.
All the riches of Arabia may not be enough to match this sort of thing.
I suppose having a chock-a-block fab is rather like having a full stomach – with the same effect, Spock.
Can’t speak for other regions, but TSMC Europe is already dying, they just don’t know it yet, as you can’t tell them in the middle of changing supplier….
Reason: they’re no longer hungry.
@ D.A.N. what competitive advantage do you believe the Common Platform offers ?
I agree, Daniel, the foundry industry’s profitability has been problematic and periodic for everyone except TSMC. Anyone can buy or build a fab, but very few can make consistent profits from one – IMHO.
Hi David,
The blogs I have done on GlobalFoundries have been some of the most popular. I have also spent quite a bit of time with the GFI guys. The semiconductor industry really wants a first source foundry competition. GFI definitely has the right people and Common Platform does offer a competitive advantage.
Unfortunately the bottom line is wafer cost, which is economies of scale and yield. Until GFI has capacity and yield at 28nm or 20nm TSMC is unstoppable as a first source foundry.
Just my opinion,
D.A.N.