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TSMC 'ahead of schedule' in 16FF+ production

Posted: 14 Nov 2014 ?? ?Print Version ?Bookmark and Share

Keywords:16FF+? FinFET? TSMC? mobile devices?

Taiwan Semiconductor Manufacturing Co. (TSMC) has reached a new milestone. On Wednesday, the company announced that it has entered risk production for its 16nm FinFET Plus (16FF+) process.

It is yet another sign that the world's largest chip foundry is ahead of schedule with its first 3D chips that will be at the core of a new generation of smaller, more powerful mobile devices, according to analysts who cover the company.

"They only took about three-and-a-half quarters to migrate to this new geometry from 20nm in the first quarter of 2014," said Carlos Peng, an analyst with Fubon Securities. "That's a little bit faster than the industry average."

TSMC is conducting small-volume shipments of 16FF+ this quarter, according to Peng. The company's announcement of the milestone included endorsements of the process technology by customers such as Avago Technologies, Freescale, LG Electronics, MediaTek, Nvidia, Renesas, and Xilinx.

"Those customers have only placed orders with TSMC, which shows a lot of confidence that TSMC is well ahead of Samsung" with FinFET, Peng said.

"Our successful ramp-up in 20SoC has blazed a trail for 16FF and 16FF+, allowing us to rapidly offer a highly competitive technology to achieve maximum value for customers' products. We believe this new process can provide our customers the right balance between performance and cost so they can best meet their design requirements and time-to-market goals," said TSMC President Mark Liu in a press release.

Other analysts show greater confidence in TSMC's FinFET schedule.

"We believe 20nm yields are approaching 80 per cent, and 16nm FF+ SRAM yields exceed 90 per cent, improving confidence that FinFET will reach 1 per cent of TSMC's third-quarter 2015 sales, 10 per cent of fourth-quarter 2015 sales, and approaching 20 per cent by the first quarter of 2016," Credit Suisse analyst Randy Abrams said in a Nov. 12 report following the TSMC announcement. TSMC "also may secure Apple for the next iPad in the fourth quarter of 2015 and iPhone 7 orders in 2016."

TSMC's technology position with its strong 20nm yield ramp and development on 16nm FF+ has resulted in an early and steeper ramp of 16nm FF+, Abrams said.

Szeho Ng, an analyst with BNP Paribas, wrote in an Oct. 16 report: "We see signs of key clients re-engaging with TSMC." The company "is also pulling forward FinFET capacity builds." The pact between Samsung and GlobalFoundries "offers little assurance of smooth production" next year. "TSMC's prior view of it having a smaller initial [FinFET] share is no longer valid; its focus on tech production excellence works again."

Conspicuous absences

Mark Li, an analyst with Sanford C. Bernstein, said TSMC's biggest customersApple, Qualcomm, and AMDwere conspicuously absent from the announcement, because they are still hedging their bets between that supplier and Samsung. He also said TSMC is on track with FinFET development.

The three big TSMC customers will keep most of their FinFET orders with Samsung during the first half of 2015, he said.

In 20nm technology, TSMC is the sole supplier to Apple and Qualcomm, according to Li. However, "they will be shifting some orders back to Samsung" in the move to FinFET early next year. "Samsung is earlier than TSMC in this generation."

Samsung is probably offering lower prices to Apple and Qualcomm for FinFET products, he said. "In the third quarter of next year, you'll see Samsung in mass production, and TSMC will not have anything until the fourth quarter. From that point, you'll see the two companies sharing the business together."

Peng said Apple aims to split its FinFET business between Samsung and TSMC as part of an "order-allocation strategy."

Samsung's low yields

Still, analysts had concerns regarding Samsung's persistently low FinFET yield rate.

"Samsung's yield has been around 30-35 per cent since the beginning of this year," Peng said. "We haven't seen any improvement. Apple and Qualcomm will shift more of their orders to TSMC if it can provide enough capacity."

Samsung may not be able to catch the first wave of FinFET demand in mid-2015, he said. The company has not significantly expanded its logic business for FinFET chips. Most of its 14nm FinFET production during the first quarter of 2015 will be used internally in the Galaxy S6 smartphone.

- Alan Patterson
??EE Times

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