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It is a well known fact that Taiwan Semiconductor Manufacturing Co. is the largest contract semiconductor manufacturer in the world. But it appears that the company has more advantages: apparently, clients seeking to make chips using the most advanced fabrication processes turn to TSMC, not its arch-rival United Microelectronics Corp.

Taiwan Economic News reports that TSMC projects that 2% of its revenue will come from its 45nm and 40nm processes by mid-2009, UMC will only start pilot production at that time. Back in Q4 2008 about 27% of TSMC’s earnings came from 65nm generation process technologies, meanwhile, UMC’s 65nm revenues accounted for just 8%. While 23% of Chartered Semiconductor’s shipments were also made using 65nm fabrication process, its revenues are about six times lower compared to TSMC, hence, the actual volume of 65nm products made by Chartered is also low.

The numbers prove that customers seeking to make highly-complex chips using advanced process technologies are mainly working with TSMC, not Chartered, IBM or UMC. This may be primarily explained by the fact that TSMC has larger manufacturing capacities and can ultimately produce higher volume of leading-edge processors.

It will be interesting to see how the creation of The Foundry Company by Advanced Micro Devices and Advanced Technology Investment Company will impact preferences of fabless chip designers. AMD itself said that at some point in future ATI, graphics products group of AMD, may start using TFC's capacities for making graphics chips using 32nm bulk process technology. There are no signs of interest from other players.

Industry watchers estimated although the silicon-foundry industry will likely plunge 35% worldwide in 2009, the four foundry suppliers-TSMC, UMC, Chartered Semiconductor Manufacturing and Semiconductor Manufacturing International Co. (SMIC) would still focus research and development efforts on leading-edge processes this year.

According to the report, TSMC plans to put its low-power 32nm process into volume production by the end of this year.

Tags: TSMC, UMC, Chartered, IBM, TFC, Semiconductors

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