Fab upgrades planned

Christine Lunday

TAIWAN—Taiwan's 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 300-mm facilities.

In the final quarter of 1999, Taiwan Semiconductor Manufacturing Co.'s board approved a US$2.46 billion capital spending plan for 2000. Funds will be used to expand and upgrade four fabs and begin construction on the company's second 200-mm plant in the Tainan Science-Based Industrial Park. At the same time, plans for 300-mm fabs in Taiwan are firming up at both TSMC and rival foundry UMC Group.

In line with TSMC's 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, says Peter Chang, CEO of foundry operations. Capacity utilization is now running at about 100 percent. “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't have enough capacity,” Chang says. “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's expansion plans include the ramp of its latest 8-inch fab, called Fab8F. In addition, UMC is firming plans for its first 300-mm 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's USIC operation (now known as Fab8C), says excavation work for the 300-mm facility was to begin last month.

Of the NT$78 billion TSMC plans to spend this 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 US$585 million will be used to begin work on two new facilities, one to accommodate 8-inch wafers (Fab 7), the other 12-inch wafers (Fab 12).

TSMC's 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 says the joint venture will allow the 300-mm operations to take advantage of Vanguard's DRAM manufacturing as a startup vehicle. Production capacity is targeted at 25,000, 300-mm wafers/month (about 56,000, 8- inch wafers equivalent.)

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

Separately, TSMC says its net sales for October 1999 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 says.


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