TSMC Vows to Ramp Up 28nm Production in 2012, Start 20nm Manufacturing in 2013.

Taiwan Semiconductor Manufacturing Company, the world's largest contract maker of chips, said that it would ramp up production of chips using today's leading-edge 28nm process technology substantially by the third quarter of 2012. TSMC also hopes to start commercial production of chips using 20nm fabrication process in 2013.

After expanding its advanced manufacturing capacities with new production lines in 2012, TSMC will be able to produce 24 thousand of 300mm wafers processed using 28nm manufacturing technology in a month in 2012, according to a report from China Economic News Service which quotes Morris Chang, chief executive officer of the company. Based on certain assumptions, it is believed that the 24 thousand wafers output for 28nm process tech will be reached by Q3 2012. By the end of the year the 28nm production capacity is expected to further increase to around 50 thousand.

TSMC decided to produce chips using 28nm technology process exclusivelly at Fab 15, which will have capacity of more than 100 thousand 300mm wafers per month when fully operational. Construction is divided into four phases, and total investment over years was initially expected to exceed $9.322 billion (NT$300 billion). TSMC began equipment move-in for the phase 1 facility in June 2011 and started volume production of 28nm technology products for customers in October, 2011. The phase 2 of Fab 15 is projected to be completed in Q4 2012 and this will boost total 28nm capacity to reach about 50 thousand wafers per month.

TSMC also reportedly decided to construct phase 3 and phase 4 of Fab 15 in parallel, which will allow it to start production simultaneously and dramatically boost its leading-edge production capacities. In particular, it is expected that TSMC will be able to start commercial manufacturing of chips using 20nm process technology in 2013. Thanks to simultaneous start of manufacturing at two phases of Fab 15, it will be able to ramp up volumes very quickly.

Based on assumption that a 300mm wafer processed using 28nm manufacturing technology costs from $4000 to $5000, the fact that TSMC expects 28nm wafers to account for 1% of its revenue in Q4 2011 (which is between $35 and $40 million), and keeping in mind that the company started to ship first 28nm wafers in late October, at present TSMC can output from 3.5 to 5 thousand 300mm wafers processed at 28nm node in a month (7 - 10 thousand in Q4 2011).