TSMC breaks 0.13 micron barrier

A breakthrough in chip technology at Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is expected to increase orders from Nvidia Corp, one of its largest customers.

TSMC recently overcame technical difficulties in its 0.13-micron processing, which allows for more transistors to be etched on each chip.

"This breakthrough is a huge success for both companies," said George Wu (吳裕良), a chip-industry analyst at Primasia Securities Co. "Nvidia is now placing bigger orders, even as far ahead as January."

Nvidia, the world's largest supplier of the graphics chips used to manipulate 3D pictures on computers and game consoles, had delayed the launch of the new processor -- co-developed with TSMC -- by up to six months while the technological issues were resolved, Wu said.

The delay was because of the complexity of the new chip's architecture.

"To produce beautiful, movie-quality images requires billions of mathematical calculations per second," Nvidia's CEO, Taiwan-born Huang Jen-hsun (黃仁勳), said during a joint news conference with TSMC in Taipei yesterday. "The new graphics processor took two years and hundreds of engineers to build."

Nvidia is one of TSMC's top-three customers. To date TSMC has produced 200 million graphics chips for Nvidia, which would create a stack 14 times the height of Mount Everest, Huang said. This represents 1.2 million wafers, the silicon discs from which the chips are cut. Eight-inch wafers are the current standard, but the industry is moving towards 12-inch wafers that yield more chips. The new 0.13-micron graphics chips are among the first to be cut in 12-inch wafers. "Initially the 0.13-micron chips were done on eight-inch wafers, but right now TSMC is moving to 12-inch wafers," said James Huang, (黃建銘), chip-industry analyst at SinoPac Securities Corp (建華證券) in Taipei. "They are probably using both processes at the moment."

TSMC now produces only 5,000 12-inch wafers each month, but with new orders from Nvidia, this figure is expected to triple to 15,000 this month, Wu said. During the press conference, TSMC chairman Morris Chang (張忠謀) said that he expects TSMC's sales to reach around US$5 billion this year.

TSMC's sales last year stood at NT$125.89 billion (US$3.6 billion), down 24.3 percent from a year earlier, amid a slowdown in the sector.

"I still stick to my previous forecast that the global semiconductor sector will see a recovery in the second quarter of next year," Chang said.