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Taiwan Semiconductor Manufacturing Company (TSMC) has made a strategic decision to delay the beginning of production at its 12-inch Fab 14, said company sources.

Fab 14 was originally scheduled to be in full production this year.

Currently, TSMC’s Fab 12, the other 12-inch fab using 0.13-micron processing, produces 10,000 wafers monthly, and the company projects it will reach 14,000 wafers per month by year-end. Compared to its total production capability of 25,000 units per month, Fab 12 at best will reach a capacity utilization of 56% in 2003.

Consequently, TSMC does not see a need to expand capacity by starting production at Fab 14, according to sources. The delay is said to be not due to a pessimistic outlook for the semiconductor industry in the second half of 2003.

In fact, demand is high for TSMC’s 0.13-micron process as orders from Nvidia, ATI Technologies and other international IDMs (integrated device manufacturers) are up. However, the customer base for the 0.13-micron process is still too small, concentrated mostly in graphics chips, DSPs (digital signal processors) and certain microprocessors, sources added.

Lead times for TSMC’s 0.13-micron production, recently rumored to be 17 weeks, are around 14 weeks, according to sources. Lead times historically have been around 10 weeks.

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Source: DigiTimes