TSMC Reportedly Hikes Pricing on 28nm Wafers Due to Increased Demand

Demand for 28nm Chips May Exceed TSMC's Supply Abilities

by Anton Shilov
09/12/2011 | 07:26 PM

Although Taiwan Semiconductor Manufacturing Company (TSMC) officially remains conservative about its revenue generated by its 28nm node claiming that its customers are delaying products made using the most advance process technologies, unofficial reports suggest that the company loads of clients for 28nm chips and has increased pricing.

 

Officially, TSMC expects its 28nm node to account for 1% of its wafer revenue in the fourth quarter of this year because of uncertainties with economics globally. 1% of TSMC's wafer revenue in one quarter at present is about $35 - $40 million, which means that the company aims to supply approximately from 7 to 10 thousand wafers processed at 28nm node this calendar year. But it looks like the demand is higher than that.

The family of 28nm process technologies at TSMC is pretty competitive, it includes 28LP (SION) for low-cost/low-power devices and should be suitable for shrinks of various designs currently made using 45/40LP, 40LPG and so on; it also sports 28HPL (HKMG) process tech for low-power/low-leakage chips, just what the doctor ordered for next-gen system-on-chip devices aimed at tablets; the 28nm family is crowned by 28HP (HKMG) for high-performance devices like graphics processors or microprocessors.

With a number of 28nm process technology flavours available, TSMC has a lot of customers from its leading-edge process technology apart from its major clients Advanced Micro Devices and Nvidia Corp., who need the latest fabrication processes to boost performance of their graphics and other chips. Apple, a major consumer electronics company these days, plans to order millions of its 28nm A6 system-on-chips for its next-gen iPad next year, which means extreme amount of chips and wafers. Besides, Altera Corp. Qualcomm and Xilinx are also interested in 28nm technology as soon as possible.

AMD plans to introduce its first "Souther Islands" 28nm products this calendar year, Nvidia intends to launch its first 28nm "Kepler" devices in 2012, but the production will start in 2011, according to the two companies. Altera, Qualcomm and Xilinx also want to initiate commercial production of chips using 28nm process technology in Q4 2011, a report by Taiwan Economic News reads. Apple wants its A6 SoCs in mass quantities in Q2 2012, based on market rumours.

A lot of factors indicate that there is demand towards 28nm process technology and it can well exceed supply. SemiAccurate web-site reports that TSMC's "yields on 28nm are not all that great", which means that the company's ability to fulfill the demands are constrained. As a consequence, TSMC decided to increase prices for 28nm chips "by somewhere between 15% - 25%. Given that a wafer processed using latest process technologies can cost $4000 - $5000, it is not hard to guess that the increase may significantly affect the costs of forthcoming graphics cards or consumer electronics.

TSMC, AMD, Nvidia, Altera, Qualcomm and Xilinx did not comment on the news-story.