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TSMC and UMC facing tight capacity due increased orders

Posted on Tuesday, November 04 2003 @ 17:35:30 CET by

Because of increased orders chip foundries TSMC and UMC are experiencing facing tight capacity. TSMC has reached full capacity utilization on 0.18-micron and below processes. Because of this the firm his extended its lead time from four to six weeks on upcoming orders. And 0.13-micron chips even have to wait 8 weeks now.

UMC is experiencing the contrary of TSMC. UMC is having capacity problems with 0.25-micron and above processes.
UMC has not extended its lead time, but has suggested LCD driver IC and consumer electronics IC design companies to confirm their orders six to eight weeks before wafer input, compared to two to four weeks originally. UMC has also informed its clients that tight supply could last through the first quarter of next year, sources said.

Most of the clients with strong demand are IDMs in North America, sources said. Orders for communications components, 802.11x WLAN and digital signal processors (DSPs) have increased since the late third quarter, they added.

TSMC’s average capacity utilization is expected to be 95% this quarter, slightly down from 98% in the third quarter due to capacity expansion, while UMC’s average utilization rate is expected to surpass 90% this quarter compared to 84% in the third quarter, the companies announced in their inventors meetings last week.

Some local officials from US-based IDMs said their companies had increased orders to TSMC and UMC because their own capacities could not handle emergent orders from clients. The officials, however, said that the IDMs had raised their forecast for wafer input at their own fabs in the fourth quarter, and would be able to meet customers’ demand even though the two foundries could not provide full capacity support.

Many IDMs and fabless companies now adopt a “dual-source” strategy for outsourcing. Companies like Texas Instruments (TI), Motorola and ATI Technologies have recently raised their 0.13-micron wafer input at UMC as a result of tight supply at TSMC, sources said.
Source : DigiTimes



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