Chartered Semiconductor Manu-facturing Ltd (
Chartered Semiconductor, based in Singapore, earlier delayed opening its Fab 7 factory by a year to the third quarter of next year after striking an agreement that allows it to use manufacturing capacity at a plant owned by International Business Machines Corp.
It may push back opening the factory again, as demand for cutting-edge chips is still limited because costs are too high, analysts said.
Chartered Semiconductor also plans to model its factory after IBM's, which isn't operating at optimal efficiency yet, they said.
"There could potentially be a delay," said Warren Lau, an analyst with HSBC Securities, who rates the shares "add."
"Chartered doesn't seem very sure about how they want to proceed with Fab 7," he said.
Chartered Semiconductor officials declined to comment on the possibility of further delays.
"Any further updates on Fab 7 will be communicated at an appropriate time," company spokeswoman Maggie Tan said.
Plans to open the factory in the third quarter of next year were made based on the company's last evaluation of the chip industry, Chartered Semiconductor said in a filing with the US Securities and Exchange Commission.
"The company is currently reassessing market demand,"its filing said.
The factory may cost US$3.5 billion to fully equip.
Chartered Semiconductor has been unprofitable for the last 10 quarters.
The new factory is intended to make chips with transistors .090 micron, or 90 nanometers, apart and on 300mm wafers.
Chartered's most advanced products now are 0.13 micron chips made on 200mm wafers. Smaller chips consume less electricity and can perform more functions.
"There is not a lot of demand" for .090 micron chips, said Pranab Kumar Sarmah, an analyst with Daiwa Institute of Research, who rates the shares "hold."
"The development cost is very expensive," he said.
As the costs of materials come down, the chips will become increasingly popular in 2005 and beyond, Sarmah said.
Chartered Semiconductor's IBM agreement allows it to use capacity in the latter's East Fishkill, New York-based factory, which opened in July last year.
It will also model Fab 7 after IBM's plant, which may be running into some manufacturing problems, Lau said.
About half the chips made at the factory are unusable and its capacity is less than half of the company's final goal, Lau said.
Chartered Semiconductor may want to wait until IBM improves its manufacturing systems before ramping up its own factory, he said.
Chartered Semiconductor would need to start ordering equipment and moving equipment into the new factory about six months before it opens, Sarmah said.
TARIFF TRADE-OFF: Machinery exports to China dropped after Beijing ended its tariff reductions in June, while potential new tariffs fueled ‘front-loaded’ orders to the US The nation’s machinery exports to the US amounted to US$7.19 billion last year, surpassing the US$6.86 billion to China to become the largest export destination for the local machinery industry, the Taiwan Association of Machinery Industry (TAMI, 台灣機械公會) said in a report on Jan. 10. It came as some manufacturers brought forward or “front-loaded” US-bound shipments as required by customers ahead of potential tariffs imposed by the new US administration, the association said. During his campaign, US president-elect Donald Trump threatened tariffs of as high as 60 percent on Chinese goods and 10 percent to 20 percent on imports from other countries.
Taiwanese manufacturers have a chance to play a key role in the humanoid robot supply chain, Tongtai Machine and Tool Co (東台精機) chairman Yen Jui-hsiung (嚴瑞雄) said yesterday. That is because Taiwanese companies are capable of making key parts needed for humanoid robots to move, such as harmonic drives and planetary gearboxes, Yen said. This ability to produce these key elements could help Taiwanese manufacturers “become part of the US supply chain,” he added. Yen made the remarks a day after Nvidia Corp cofounder and chief executive officer Jensen Huang (黃仁勳) said his company and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) are jointly
United Microelectronics Corp (UMC, 聯電) expects its addressable market to grow by a low single-digit percentage this year, lower than the overall foundry industry’s 15 percent expansion and the global semiconductor industry’s 10 percent growth, the contract chipmaker said yesterday after reporting the worst profit in four-and-a-half years in the fourth quarter of last year. Growth would be fueled by demand for artificial intelligence (AI) servers, a moderate recovery in consumer electronics and an increase in semiconductor content, UMC said. “UMC’s goal is to outgrow our addressable market while maintaining our structural profitability,” UMC copresident Jason Wang (王石) told an online earnings
MARKET SHIFTS: Exports to the US soared more than 120 percent to almost one quarter, while ASEAN has steadily increased to 18.5 percent on rising tech sales The proportion of Taiwan’s exports directed to China, including Hong Kong, declined by more than 12 percentage points last year compared with its peak in 2020, the Ministry of Finance said on Thursday last week. The decrease reflects the ongoing restructuring of global supply chains, driven by escalating trade tensions between Beijing and Washington. Data compiled by the ministry showed China and Hong Kong accounted for 31.7 percent of Taiwan’s total outbound sales last year, a drop of 12.2 percentage points from a high of 43.9 percent in 2020. In addition to increasing trade conflicts between China and the US, the ministry said
RSS