Contract Semiconductor Makers Slowdown Fab Expansion – Report

Chartered, TSMC, UMC Decelerate Expansion of 300mm Fabs

by Anton Shilov
09/11/2008 | 12:39 PM

Leading contract makers of semiconductors are slowing down their purchases of 300mm production equipment, a media report citing producers of appropriate tools claims. The deceleration may reflect slowing demand towards complex high-end semiconductors.

 

DigiTimes web-site reports that even though Taiwan Semiconductor Manufacturing Company has maintained that the fourth and fifth stages of expansion to its 300mm fabs are going on as planned, the No. 1 contract maker of chips remains conservative in terms of placing equipment orders for the project.

Moreover, UMC has not installed any production equipment into its fab 12B, which building was recently completed. In addition, Chartered Semiconductor has also made decision to decelerate capacity expansion at its 300mm fab 7, according to makers of high-tech equipment.

Reduction of the pace of manufacturing capacity expansion is rather alarming as it means that contract makers do not expect high-demand towards highly-integrated chips in the coming quarters. However, over-investment is an issue discussed by ex-chairman of UMC earlier this year.

“The semi industry is an industry with some of the most brilliant people in the world, and they do the most stupid things,” said Robert Tsao, chairman emeritus of United Microelectronics, referring to over-investment. They also “cut each other’s throats,” he added in an interview with Forbes.

Considering the fact that leading contract makers of chips do not expect surge of demand towards their products, it is unclear how Advanced Micro Devices plans to spin-off its fabs later this year.