Unnamed graphics cards producers expect that the 40nm process yields at Taiwan Semiconductor Manufacturing Company’s fab will improve only in August, 2009. This will curtail supplies of graphics processing units by ATI, graphics business unit of Advanced Micro Devices, and Nvidia Corp. made using 40nm fabrication process.

Production yields of 40nm chips at TSMC’s capacities is currently less than 25%, which is dramatically lower than any customer of the world’s largest contract maker of semiconductors would expect, claims DigiTimes web-site. TSMC is “offering preferential quotes to AMD as compensation”, according to the report.

Nvidia plans to ramp up production its recently announced graphics processing units (GPUs) using 40nm process tech at TSMC in August. Meanwhile, ATI is trying hard to supply any amount of its desktop and mobile code-named RV740 GPU (40nm) to respective markets.

According to the report, Nvidia has said that its 40nm GPU production at TSMC will be limited to OEM parts initially. 40nm GPUs destined for the channel market will be introduced when the process is more mature, likely around the end of the year.

Recently ATI/AMD admitted that there were problems with supplies of 40nm-based RV740 graphics chips.

Tags: TSMC, 40nm, ATI, Nvidia, AMD, Radeon, Geforce