TSMC plans new wafer plant

Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world's biggest made-to-order chipmaker, said yesterday that it was considering building a new 12-inch wafer plant to keep up with demand amid a tech turnaround.

"We are scouting for a possible site for a new plant overseas, or in the nation," said Tzeng Jinnhaw (曾晉皓), a spokesman for TSMC. "Taichung is one of our options, but we haven't come to a final decision yet."

"The capacity expansion aims to meet future demand," Tseng said.

The chip industry started to recover from a three-year slump in the spring of last year, and in the past quarter TSMC plants were running at full capacity.

Tseng said the company had not worked out how much it would spend on the plant, denying a local Chinese-language newspaper saying that TSMC could spend NT$300 billion on its third 12-inch wafer fab and a research center in the Central Taiwan Science Park (中部科學園區) in Taichung.

Jones Wang (王源錦), a deputy manager at ABN-AMRO Asset Management Taiwan, said, "It's a necessary step for TSMC to maintain its dominance in the semiconductor industry by outpacing rivals both in advanced technologies and capacity expansion."

It will be easier and cheaper for TSMC to raise capital as investors are more willing to buy tech shares when the industry is on the mend, Wang said.

TSMC said in January that it was planning to raise capital expenditure to US$2 billion this year, up from US$1.25 billion last year. Rival United Microelectronics Corp (聯電) plans to spend US$2.12 billion this year.

TSMC owns two 12-inch wafer factories in Hsinchu and Tainan. The two advanced fabs now can produce about 10,000 chips each per month, according to Tseng.

TSMC shares were unchanged yesterday at NT$67 on the TAIEX.

An official from the Central Taiwan Science Park told the Taipei Times that TSMC had approached the park about possible investment but that no plan had been submitted.

"We hope TSMC will choose Taichung for its new plant as we can provide sufficient water and electricity," said Yang Wen-ke (楊文科), deputy director general of the park's administration.

Yang said the park's public facilities, easy access to land and proximity to the Hsinchu Science-based Industrial Park had attracted many high-tech companies.

Winbond Electronics Corp (華邦電子), a leading memory chipmaker in the nation, located its NT$120 billion, 12-inch fab in Taichung.

Smaller rival ProMOS Technologies Inc (茂德) also plans to pour NT$250 billion into building its first 12-inch fab in the park. The groundbreaking ceremony is scheduled to take place next month.

Yang said the park's 332 hectares had already been rented out and that TSMC would be allocated land in a 85-hectare plot being prepared.