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TSMC plans to set-up its first 12in wafer fab in China

Posted: 09 Dec 2015 ?? ?Print Version ?Bookmark and Share

Keywords:TSMC? foundry? wafer fab? Intel? Samsung?

Taiwan Semiconductor Manufacturing Co. (TSMC) has announced that it aims to build its first 12in fab in China to take advantage of the strong demand in the world's fastest growing chip market. The company said it submitted an application to Taiwan's Investment Commission under the Ministry of Economic Affairs to build a wholly-owned 12in fab and a design service centre in China's inland city of Nanjing.

"In view of the rapid growth of the Chinese semiconductor market, we have decided to establish a 12in wafer fab and a design service centre in China to provide closer support to our customers there and to further expand our business opportunities," stated TSMC chair Morris Chang.

TSMC will join a growing list of chipmakers that have already started 12in fab projects in China, which, according to industry organisation Semiconductor Equipment and Materials International (SEMI), has one of the world's largest semiconductor markets, yet imports most of the chips it uses to assemble products such as Apple iPads and iPhones.

2014 leading imports to China

TSMC will join a growing list of chipmakers that have rolled out 12in fab projects in China, which, according to SEMI, has one of the world's largest semiconductor markets.

TSMC would join Intel, Samsung, SK Hynix and Chinese chipmakers such as Semiconductor Manufacturing International Corp. (SMIC), which have opened or are underway with projects to make chips on 12in wafers, according to SEMI.

TSMC said it will own 100 per cent of the fab, which will help the company protect its IP and trade secrets.

The sum of the entire investment project is $3 billion, including equipment, some of which will come from existing fabs in Taiwan, and assistance from the Chinese government, according to TSMC. As a result, the company's net investment will be less than $3 billion.

Nanjing location

TSMC said Nanjing has a relatively complete semiconductor supply chain and a large pool of engineering talent. These factors, as well as the local government's willingness to support TSMC, led to the decision, the company said.

TSMC said the planned capacity of the facility in China is 20,000 12in wafers per month, and the company aims to begin volume production of 16nm process technology in 2H18. TSMC said the design service centre would establish the company's design ecosystem in China.

TSMC's CAGR for revenue from Chinese customers, including chip design companies such as HiSilicon, has exceeded 50 per cent in the past five years.

TSMC makes conservative outlook for 2015
TSMC revealed that the outlook for the rest of this year is worse than the company previously expected because customers are digesting an inventory build-up that built up earlier this year. TSMC chair Morris Chang said "Inventory is being depleted more slowly than we expected."

TSMC expects the fab headcount to be 1,200. Initially, staff from Taiwan and an existing 8in fab located in Shanghai will help with construction and the production ramp up at Nanjing, with additional local hiring as the schedule proceeds. Before volume production starts, staff transferred from Taiwan will account for more than 50 per cent of the personnel at Nanjing.

The Taiwan government has restricted domestic chip investments in China on concerns it will lose jobs and technology.

TSMC said it will keep its most advanced process technologies, key production lines and core R&D efforts in Taiwan. The investment in China is aimed at increasing business opportunities in China, which TSMC said will have a positive effect on additional expansion in Taiwan.

TSMC plans to start the project after receiving approval from Taiwan's Investment Commission.

- Alan Patterson
??EE Times

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