Chip foundry has trouble meeting 28nm demand

Jun 16, 2012 by Nancy Owano report

(Phys.org) -- The next big things in mobile devices are being hammered by the next big headache for device makers—the chips at the foundation of their supply chain. High demand for devices is trickling down to the fact that chip factories cannot keep up with demand. Especially rattling nerves has been news that Taiwan Semiconductor Manufacturing Company (TSMC) continues to report 28nm chip supply issues, which are expected to continue until the end of the year. Speaking at the annual general meeting, the TSMC chief said chip supplies will not be able to satisfy market demand until 2013.

TSMC is the world’s largest contract maker, producing SoCs for chip vendor Qualcomm, Nvidia, and others. TSMC is also regarded as the world's largest foundry and technological leader in 28nm chip production, but its 28nm yields are not high enough to satisfy demand.

“Demand of 28-nanometer has surpassed our customers and our expectations, resulting in supply shortage. I think the worst of the supply shortage is behind us. We expect that we will be close to catching up in the fourth quarter this year. And we expect to have completely caught up with demand by the first quarter next year. And we will not fall behind again,” Morris Chang, CEO, told investors in April during a conference call.

Chang blamed the shortage on the fact that demand of 28-nanometer surpassed both his customers and the company’s own expectations. “This supply shortage problem is not caused by new problems but by underestimates by both our customers and us, of the capacity and ramp-up speed required this year.”

Qualcomm, a TSMC customer. must not only seek understanding but solutions for its business. (Qualcomm designs chips and blueprints are handed over to TSMC.) In March there was talk of how Qualcomm, unhappy about TSMC’s supply issues, was moving some of its business to GlobalFoundries and UMC. Qualcomm had warned in April that it will have trouble meeting demand for some of its advance cellphone chips for the rest of the year due to manufacturing constraints. However, earlier this month, Qualcomm said it expects advanced 28-nanometer chip supply to be under control towards the year-end. The Reuters report said that now was working with not only TSMC, but also “other foundries” to increase supply of the chips.

Likewise, there are stories that other customers may be shopping around for competing foundries to address demand.

Samsung has moved to get around the problem by investing in its own chip manufacturing line for mobile processors planned for completion by the end of next year. The company will spend $1.9 billion to build the plant to meet demand for chips powering , according to Samsung. This is Samsung’s way of keeping control over the supply chain.

Explore further: X-ray detector on plastic delivers medical imaging performance

Related Stories

TSMC reports shrinking profit, revenue in 3Q

Oct 27, 2011

(AP) -- Taiwan Semiconductor Manufacturing Co., the world's largest contract chip maker, said Thursday its earnings dropped by more than a third in the latest quarter amid uncertainties about the global economy.

TSMC Achieves 28nm SRAM Yield Breakthrough

Aug 24, 2009

Taiwan Semiconductor Manufacturing Company has become the first foundry not only to achieve 28nm functional 64Mb SRAM yield, but also to achieve it across all three 28nm nodes.

Qualcomm Snapdragon chipset heads for tablets, TVs

Jan 11, 2012

(PhysOrg.com) -- Qualcomm used the CES event in Las Vegas yesterday to showcase its Snapdragon S4 line of chips, expected to ship in devices later this year. A key highlight was the company’s demo of ...

Samsung starts new chip line to boost flash memory

Sep 22, 2011

Samsung Electronics, the world's largest memory chip maker, said Thursday it has begun mass production at a new line to raise production of flash memory chips used in tablets and smartphones.

Recommended for you

Hand out money with my mobile? I think I'm ready

23 minutes ago

A service is soon to launch in the UK that will enable us to transfer money to other people using just their name and mobile number. Paym is being hailed as a revolution in banking because you can pay peopl ...

Tiny power plants hold promise for nuclear energy

30 minutes ago

Small underground nuclear power plants that could be cheaper to build than their behemoth counterparts may herald the future for an energy industry under intense scrutiny since the Fukushima disaster, the ...

Obama launches measures to support solar energy in US

1 hour ago

The White House Thursday announced a series of measures aimed at increasing solar energy production in the United States, particularly by encouraging the installation of solar panels in public spaces.

Tailored approach key to cookstove uptake

1 hour ago

Worldwide, programs aiming to give safe, efficient cooking stoves to people in developing countries haven't had complete success—and local research has looked into why.

User comments : 0

More news stories

Tiny power plants hold promise for nuclear energy

Small underground nuclear power plants that could be cheaper to build than their behemoth counterparts may herald the future for an energy industry under intense scrutiny since the Fukushima disaster, the ...

Hand out money with my mobile? I think I'm ready

A service is soon to launch in the UK that will enable us to transfer money to other people using just their name and mobile number. Paym is being hailed as a revolution in banking because you can pay peopl ...