It is natural that many fabless semiconductor companies slashed their orders to Taiwan Semiconductor Manufacturing Company and United Microelectronics Corp. in the first months of 2009 as a result of lowering sales because of economic crisis as well as because the first two months of every year are very slow in terms of sales. However, fabless chip suppliers are boosting orders.

According a report from Taiwan Economic News, TSMC has landed orders that will keep it busy until mid-June, while UMC has won orders that will keep its production lines operational through May. TSMC will reportedly boost utilization 300mm fabs to 80% from 50%, whereas 200mm fab utilization will reach 60%.

According to media reports, orders from many companies, including Advanced Micro Devices, Altera, Intel Corp., Inventec, MediaTek, Nvidia Corp., Qualcomm, Texas Instruments, are rising their orders by 10% to 30% over previous periods to both TSMC and UMC.

Daniel Heyler, who tracks semiconductor market for Merrill Lynch, even felt the recent rush orders were not just for inventory re-buildups but also represented true demands coming back.

Considering the fact that both ATI, graphics products group of Advanced Micro Devices, and Nvidia Corp. – leading developers of discrete graphics processing units – are both projected to release their new graphics chips made using 40nm process technology sometimes in Q2 2009, it is logical that the two companies are ramping up orders to build new inventories for which they expect increasing demand sometime in future.

Tags: TSMC, UMC, Semiconductor, Business