TSMC plans expansion of its advanced tech capacity

The board of Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday gave the green light to a capital appropriation of around US$706 million to expand the capacities of advanced technology as part of greater efforts to safeguard its competitiveness.

"TSMC will spend the money during an unspecific period of time," Tzeng Jinn-haw (曾晉皓), a spokesman at the world's top contract chipmaker, said yesterday in a phone interview with the Taipei Times.

The Hsinchu-based chipmaker will use the capital on expanding the advanced 65 nanometer processing technology at its 300 millimeter (12 inch) fabs, as well as on increasing capacities on 0.15-micron and 0.18-micron processing technologies at 200 millimeter (8-inch) factories, the company said in a statement.

TSMC plans to spend between US$2.5 billion and US$2.7 billion on new equipment this year.

"To maintain competitiveness, it is crucial for contract chipmakers to invest more on advanced technologies, which will help lift margins and improve cost efficiency. TSMC is no exception," said David Lin (林振偉), a semiconductor analyst with Grand Cathay Secur-ities Co (大華證券).

Lin said the investment will pay off in the first quarter of next year, when TSMC is expected to get a significant portion of its earnings from chips made on advanced 90 nanometer and 65 nanometer processing technologies.

TSMC said it already engaged with a handful of high-volume customers in providing manufacturing services on 65 nanometer processing technology and hopes to beef up production next year.

Last quarter, chips made using 90 nanometer technology accoun-ted for 10 percent of TSMC's total revenue of NT$69.26 billion, up from 2 percent in the second quarter. TSMC hopes to boost the percentage to around 20 percent this quarter.