Taiwan Semiconductor Manufacturing Co (TSMC, 台積電 ) yesterday said it is postponing the construction of a new fab in Kaohsiung for the production of 7-nanometer (nm) chips in response to weak demand, but the world’s biggest contract chipmaker reiterated its commitment to continue investing in advanced technology in Taiwan.
TSMC chief executive officer C.C. Wei (魏哲家) made the announcement at an Industrial Technology Research Institute (工研院) event in Hsinchu yesterday, after recent speculation about the company’s capacity expansion plan in Kaohsiung.
Last month, Wei told investors that TSMC had initially planned to build two factories to make 7-nanometer and 28-nanometer wafers in the new Nanzih Technology Industrial Park in Kaohsiung.
Photo: Tyrone Siu, REUTERS
With the semiconductor industry entering an inventory correction cycle, TSMC has “adjusted” the fab for the 7-nanometer factory due to weak demand for chips used in smartphones and computers, Wei said.
In the fourth quarter of this year, the capacity utilization of 7-nanometer and 6-nanometer chips would not be as high as it had been in the past three years, he said.
However, the plan to build the 28-nanometer fab would proceed on schedule and could even be expanded, he said.
The chipmaker has yet to break ground on either project. A groundbreaking ceremony for the park was held in August. The park is on a site where state-owned oil company CPC Corp, Taiwan (中油), used to operate a naphtha cracker.
To build a resilient supply chain, TSMC is building capacity in the US and Japan. The Wall Street Journal reported on Thursday that TSMC aimed to build a second chipmaking plant in Arizona.
TSMC said it is evaluating the possibility of the expansion plan, but nothing is substantial yet.
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