Analyst: Tough times for TSMC's 28nm process

Taiwan Semiconductor Manufacturing Co. Ltd's (TSMC) 28nm manufacturing process technologies is in trouble as it is not yielding well, says Mike Bryant, technology analyst with Future Horizons Ltd. Bryant referenced unnamed contacts with several companies that are waiting for designs produced by TSMC on 28nm processes.

Bryant said that there are 10 designs in manufacture from seven companies. "We're now hearing none of them work; no yield anyway," he told an audience at a one-day market forecast conference organized by Future Horizons. "Ten designs going through; we have heard about problems on six of them," Bryant added. Bryant's comments echo those made by Bob Johnson, research vice president at market research firm Gartner in November 2011.

Bryant's description of the situation at TSMC is quite different to that of the company's CEO and chairman Morris Chang. Speaking to analysts about TSMC's fourth quarter financial results on the previous day, Chang said: "Our 28nm entered volume production last year and contributed 2 percent of 4Q11's wafer revenue. Defect density and new progress is ahead of schedule and is better than 40-45nm at the corresponding stage of the ramp-up. We expect 28nm ramp this year to be fast and we expect 28nm will contribute more than 10 percent of total wafer revenue this year."

Nonetheless, Bryant asserted that Intel Corp. has a clear technology leadership position as it has been running 32nm manufacturing process for some time and that pressure to keep up with Intel had caused some miss-steps by TSMC, while Samsung Electronics Co. Ltd, with experience gleaned running 20nm class memories, had successfully brought up its 28nm low power logic process.

In contrast, TMSC is in a similar situation to Globalfoundries Inc. which saw problems with its 32nm/28nm processes in 2011 that appeared to drive its primary customer, Advanced Micro Devices Inc., toward TSMC as a source of integrated circuits. Bryant acknowledged that the TSMC 28nm process is now in true volume production and the Qualcomm Snapdragon S4 has won the highest proportion of available design slots. "However, there are recent comments of major yield problems with their 28nm process actually being even worse than at GF (Globalfoundries)," Bryant told the audience.

Intel's lead in process technology has put foundries under pressure, Bryant said. The 18-month to two-year time scales needed to develop processes and design complex ICs mean that both are being begun before the other is completed and stable. While that process can be managed in-house by an IDM such as Intel, foundries are finding it more difficult as they have to work with customers on chips and physical design kits at the same time.

Cell libraries too early?
"Foundries have come under pressure to release cell libraries too early—which end up with designs that don't work," Bryant said. And now TSMC is trying to launch ten 28nm designs from seven companies because they wish to be seen to be even-handed with all comers, Bryant said. "At 45nm, only Nvidia Corp. was affected. At 28nm any problems for TSMC will be problems for many customers."

It was reported in late 2011 that Samsung was ramping production of the A6 quad-core application processor for Apple Inc. because TSMC had not yet stabilized its own production of the same chip. Apple's continued reliance on Samsung came despite an increasingly litigious battle between the companies at the system level where both are seeking to prevent the sale of the others smart phones because of alleged patent infringements.

In August 2011, TSMC was reported to have begun trial manufacturing of an A6 processor design for Apple but to be redesigning the chip for volume production in the first quarter 2012. One potential reason of the respin is that TSMC plans to use 3-D stacking technologies along with its 28-nm manufacturing process in the production of the A6 for Apple. The use of a specialized silicon interposer and bump-on-trace interconnect may produce specific requirements in the main processor die.

The Apple iPad 3 tablet computer is expected to launch in March 2012, based on the A6 quad-core processor.

In the analysts conference call Chang said: "We have so far completed 36 individual tapeouts and have scheduled another 132 individual product tapeouts in 2012. While three versions of the 28nm technology, the LP, the HP and the HPL have entered volume production, the fourth version, the HPM has entered risk production this quarter and is expected to begin volume production in the second half of this year."

- Peter Clarke
??EE Times