By Christine Lunday, SST Online editor

Taiwan&#39s top two foundries are planning to invest a total of more than $4.6 billion on the island next year to upgrade and build several fabs, including two 300mm facilities.

Recently, Taiwan Semiconductor Manufacturing Co.&#39s board approved an NT$78 billion (about US$2.46 billion) capital spending plan for next year. Funds will be used expand and upgrade four fabs and begin construction on the company&#39s second 200mm plant in the Tainan Science-Based Industrial Park. At the same time, plans for 300mm fabs in Taiwan are firming up at both TSMC and rival foundry UMC Group.

In line with TSMC&#39s spending goals, UMC is planning to spend NT$70 billion next year to support an aggressive expansion plan. The foundry estimates capacity next year will total 2.4 million wafers, up from 1.7 million wafers this year, said Peter Chang, CEO of foundry operations. Capacity utilization is now running at about 100%. “The ideal case for a foundry operation model is capacities running probably 90 percent, 95 percent. Right now, the situation is very uncomfortable. Almost every customer is complaining … because they don&#39t have enough capacity,” Chang said. “With the capacity increase next year, we still have big problems. The reason is very simple: The last couple of years nobody invested, only Taiwan invested. Even though we invest really heavily, it is not enough.”

UMC&#39s expansion plans include the ramp of its latest 8-inch fab, dubbed Fab8F, which will use an all-scanner approach with both DUV and i-line litho tools, notes Chris Chi, UMC senior VP. The facility, located in the Hsinchu Science-Based Industrial Park, is in the process of equipment move-in, with first production scheduled for early 2000. The fab will have capacity of 40,000 wafers/month when fully ramped; the ramp mix will involve 0.24 micron Flash, 0.21 DRAM, and 0.18-0.22 micron logic products. Considered to be UMC&#39s most advanced fab, the facility will incorporate copper processing, have 0.18 micron and below capability, and will use a SMIF minienvironment approach, Chi said.

In addition, UMC is firming plans for its first 300mm fab, though the facility will be located in the Tainan Science-Based Industrial Park, a newer complex being developed in the southern part of Taiwan as a sister park to the Hsinchu Science-Based Industrial Park. Frank Wen, president of UMC&#39s USIC operation (now known as Fab8C), said excavation work for the 300mm facility will begin in about a month.

Of the NT$78 billion TSMC plans to spend next year, roughly NT$58,953 million will be used to expand and upgrade lines at its Fab 5 in Hsinchu and Fab 6 in Tainan to accommodate 0.15 micron processing technologies. The funds also will be used to expand copper processing capacity at Fab 3, Fab 4, and Fab 6, as well as to establish a wafer bumping line in Fab 1.

Another NT$18,608 million (about US$585 million) will be used to begin work on two facilities, one to accommodate 8-inch wafers (Fab 7), the other 12-inch wafers (Fab 12).

TSMC&#39s Fab 12 is a joint venture with Vanguard International Semiconductor Corp. Construction will begin in the first quarter of 2000. The fab will be built on land allocated to Vanguard in the Hsinchu Science-Based Industrial Park; the parcel is said to be one of the last remaining quality fab sites in the government-managed industrial park. A company spokesman in Taiwan said the joint venture will allow the 300mm operations to take advantage of Vanguard&#39s DRAM manufacturing as a startup vehicle. Production capacity is targeted at 25,000, 300mm wafers/month (about 56,000, 8-inch wafers equivalent.)

Meanwhile, TSMC&#39s Fab 7 will be its second fab in the Tainan Science-Based Industrial Park, a 200mm facility with a production capacity of 40,000 8-inch wafers/month. TSMC said the fab will incorporate 0.18 micron through 0.10 micron processing technologies. TSMC&#39s first fab in Tainan, Fab 6, will begin ramping operations early next year.

Separately, TSMC said its net sales for October were NT$7,212 million (about US$227 million), up from NT$4,214 million in October, 1998. Sales from January to October totaled NT$56,652 million, the company said.