Taiwan Semiconductor Manufacturing Company said it would build an additional 300mm production facility in order to boost capacity for advanced process technologies. This will be third TSMC’s “gigafab” that would process 300mm wafers.

TSMC is the world's largest dedicated semiconductor foundry which operates a 150mm wafer fab (fab 2), five 200mm wafer fabs (fab 3, 5, 6, 8 and WaferTech) and two 300mm wafer “gigafabs” (fab 12 and 14). The latter two factories produce chips using so-called advanced process technologies, which are 130nm and below. About 71% of TSMC’s revenue comes from advanced fabrication processes and the demand is increasing quickly.

Morris Chang, chairman and chief executive of TSMC, recently pointed out that the company`s supply of advanced process technologies was already 30-40% short of demand. The shortage is projected to grow as many integrated device manufacturers (IDMs), such as Fujitsu, have begun to increase outsourcing to pure manufacturers due to rising development cost of leading-edge fabrication processes and tremendous costs of building new semiconductor facilities, reports China Economic News Service.

The future 300mm fab will process chips using 28nm process technology (and probably below) and will cost the company around $3.1 billion, the lion’s share of TSMC’s annual capital expenditure in 2010 of $4.8 billion. Construction is set to start in the middle of this year. Planned capacities are currently unknown, but given the recent trends, it can be expected that the fab will be expandable.

In addition to building the new factory, TSMC will also expand capacities of the current 300mm facilities. Mr. Chang, is reported to have said that once the expansions are completed, the two fabs will be able to turn out a total of 100 thousand wafers a month, which seems to increase output of advanced products by 35%.

Tags: TSMC, Semiconductor, Business, 28nm