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TSMC makes deeper cut in capital spending

Posted: 16 May 2001 ?? ?Print Version ?Bookmark and Share

Keywords:tsmc? wafer? umc? foundry? wafer fab?

Falling in line with several Japanese chipmakers, Taiwan Semiconductor Manufacturing Co. Ltd is slicing an additional $307 million from its capital expenditures because of lower-than-expected demand for ICs. The 12 percent cut brings the foundry's 2001 capital investment down to about $2.1 billion.

"The change will target our 8-inch (200mm) operations. None of our 12-inch (300mm) plans will be affected," said a spokesman for TSMC. The decision came after the company said it might delay the tool move-in at Fab 14, one of two dedicated 12-inch wafer fabs under construction.

Deutsche Bank predicted that the foundry would see its utilization rate drop to 50 percent in the second quarter before inching its way upward again to 65 percent in the third quarter and 80 percent in the fourth quarter. TSMC does not comment on its utilization rate or pricing but a manager at one of the foundry's major customers said, "TSMC's pricing is not that stable right now. When capacity is not running at 100 percent we can get changes. It is something we do not really discuss."

TSMC's No.1 competitor, United Microelectronics Corp., said no changes have been made in its expenditure plans. UMC will spend about $1.5 billion this year, down from $2.8 billion last year. "I do not really see any adjustment below that. Most of that spending is for strategic 12-inch fabs and some copper process equipment," said spokesman Alex Hinnawi. "Some other companies were a bit optimistic in the beginning and did not adjust down that much. We have already made significant cuts." Fujitsu, Hitachi, NEC and Toshiba are looking at trimming capital spending by over 20 percent this year.

? Mike Clendenin

EE Times

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