( ESNUG 502 Item 1 ) -------------------------------------------- [04/19/12]
From: John Cooley <jcooley=user domain=zeroskew got calm>
Subject: After 14 weeks, TSMC now finally admits it has 28 nm problems
A story that started 14 weeks ago when Future Horizons CTO Mike Bryant said
at a London conference that:
"Six out of ten of TSMC's 28 nm customers were reporting yield problems."
- ElectronicsWeekly.com (01/20/12)
Then 7 weeks ago the story exploded with:
"TSMC shut down 28 nm production about three weeks ago. No, we are not
joking, word has reached SemiAccurate that TSMC halted 100% of 28 nm
production in mid-February to make unnamed changes to the process."
- SemiAccurate.com (03/07/12)
Then 7 weeks ago (minus 2 days) TSMC replied:
"Regarding this issue, our policy is not to comment on market rumors.
However, I want to inform you that our 28 nm production is normal,
and all our 28 nm customers are fully aware of our production status."
- DeepChip.com (03/09/12)
Which 3 weeks ago triggered user responses like:
"What exactly is 'normal' 28 nm production? Normal vs. what?
It took them 2 years to get 40 nm up. Is that 'normal'?"
- DeepChip.com (04/04/12)
---- ---- ---- ---- ---- ---- ----
Since then this TSMC 28 nm story has now had 5 new major developments.
First, 13 days ago DigiTimes speaks up:
"TSMC 28nm foundry capacity has been drastically short of demand for
Qualcomm, AMD and Nvidia mainly, but the shortage is expected to relax
at the end of the third quarter of 2012, according to industry sources."
- DigiTimes.com (04/06/12)
Then 10 days ago TSMC makes a new public statement:
"We are working very hard trying to solve the 28 nm capacity shortage
issue. Not only is our fab is trying to squeeze out more output, we
plan to increase capital spending for 28 nm this year."
- TSMC's Elizabeth Sun to Bit-Tech.net (04/09/12)
Then 2 days ago DigiTimes talks about yield:
"TSMC reportedly is having yield problems with its 28 nm nodes causing
the difficulty in ramping up the process capacity. There is also
speculation the foundry had been trying to control the availability of
its 28 nm capacity as insufficient yield rates would affect its gross
margin performance."
- DigiTimes.com (04/17/12)
Also, 2 days ago the CEO of TSMC speaks up:
"Yes, we had some difficulties with 28 nm, but those difficulties had
to do with not having enough capacity, not yields."
- TSMC's Morris Chang in EEtimes.com (04/17/12)
---- ---- ---- ---- ---- ---- ----
Regardless of whether it is yield or capacity issues that are preventing
TSMC from meeting customer demand, Digitimes.com reports that companies are
now looking at second source 28 nm fabs:
"The reported tight supply of chips built using TSMC's 28 nm process
technology is likely to drive Nvidia and Qualcomm toward other
foundries as a second source ... Nvidia has begun sampling chips on
Samsung's 28 nm ... Qualcomm has approached UMC and GlobalFoundries
for additional capacity."
- DigiTimes.com (04/17/12)
For my Wall Street readers, the reason why TSMC is stressing that this
is a capacity issue is because CAPEX spending means you can buy more
manufacturing equipment to fix the problem. If it's a yield issue, it
means TSMC is facing technical problems which can not be fixed by buying
more manufacturing equipment.
- John Cooley
DeepChip.com Holliston, MA
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