Taiwan Semiconductor Manufacturing Co. Ltd. last week put the Tainan Science Industrial Park on the map as an official manufacturing center by opening what it says is the world's largest wafer fab.
The 190,000-sq.-ft. plant began limited production of 8-in. wafers in January, and will ramp to 32,000 wafers per month by the end of the year. In the fourth quarter, it will begin pilot runs of 4,500 12-in. wafers a month, according to TSMC, which plans to spend $2.4 billion on the facility by year's end.
"The grand opening of Fab 6 is a remarkable achievement," said TSMC president F.C. Tseng. "It's the largest semiconductor fab ever built and is the first foundry in the Tainan Science Industrial Park [TSIP]. It also features the highest-yielding 8-in. pilot line in our company's history."
Fab 6 is the first of six plants TSMC has planned for the science park, located in southern Taiwan. Construction of Fab 14, a 12-in.-wafer plant next to Fab 6, has already begun and is slated for completion in the first quarter of 2002.
Taiwan's chip-production base has long been centered at the Hsinchu Science-based Industrial Park. With the opening of the Tainan complex, manufacturers are counting on a new wave of growth to sweep the country's semiconductor foundry industry.
"[TSMC's new fab] is a big milestone for TSIP," said Huang Chen-tai, chairman of the National Science Council (NSC), which is in charge of the park's administration. Huang said the Hsinchu industrial park generated revenue of more than $21 billion last year, compared with about $132 million in Tainan. Within four years, however, the NSC expects Tainan to produce revenue of between $13 billion and $16.5 billion and employ as many as 300,000.
"Tainan's turning into an important manufacturing base," said H.J. Wu, general manager of United Microelectronics Corp., Taiwan's second-largest foundry-services provider. "Currently, Hsinchu is oversaturated and will probably run in the direction of a research and design center, while manufacturing gets concentrated down south."
Less than a half mile away from TSMC's Tainan plants, UMC is building Fab 12A, which should be running a pilot line in the first quarter of next year at a run rate of about 5,000 12-in. wafers per month on a 0.13-micron process. Ultimately, the fab will have two lines, each capable of 20,000 12-in. wafers per month. UMC said it plans to build five 12-in.-wafer fabs in TSIP by 2010.
Nonvolatile-memory manufacturer Macronix International Co. Ltd. has also expressed interest in the new park. "Tainan looks quite promising, and any future fab construction plans will definitely take it into consideration," said Fuchia Shone, the company's associate vice president of memory.
The biggest challenge facing sustainable growth in Tainan is the ability of the Taiwanese government to keep up with mounting infrastructure requirements-something county governor Mark Chen said has become a top priority for the region.
However, not everyone is convinced the park will be able to provide sufficient water and power needs. Local DRAM manufacturer Nanya Technology Corp., for example, said the supporting infrastructure is too underdeveloped to attract talented staff.
"Labor shortages in Taiwan are very serious now, and resource competition in the science parks is too hot," said the company's executive vice president, Charles Kao. "We're able to hold onto our most talented personnel and attract more because we're not located in far-off corners."
Nanya has fabs in Taoyuan and Linkou. Both are close to metropolitan areas and offer a higher standard of living than the more rural southern end of the island.
Nevertheless, TSMC is betting its initial investment in the park will yield a fab capable of producing 50,000 8-in. wafers a month while supporting a 12-in. pilot line. In fact, the Tainan pilot line will be the proving ground for TSMC's future fabs and will determine which processes and tools the company will use for 12-in.-wafer production, according to fab director Chao Ying-chen.
"Fab 6 will handle 8- and 12-in. wafers at the same time," Chao said. "When Fab 12 [in Hsinchu] is completed, we will move 12-in. production there."
Fab 12 is slated for completion in fourth- quarter 2001 and will serve as TSMC's R&D center. "We anticipate developing 0.1-micron [process technology] on 12-in. wafers in Fab 12," said Ron Norris, senior vice president of worldwide sales and marketing.
TSMC's expansion is part of an aggressive capital expenditure plan that will see the company invest some $4.4 billion this year on new capacity, vs. $1.65 billion a year ago.
"We follow a linear expansion plan, which means that we've set our sights on steady 25% growth regardless of downturn or upturn in the industry," said Morris Chang, TSMC's chairman. "However, in 1998, we backed off slightly because of the sharp downturn and modified to 20%. Last year, we realized our error and will increase our expansion to 30% to 40% over the next two to three years in order to catch up."
This year, TSMC expects to increase output by 79%, to 3.4 million wafers, compared with nearly 1.9 million in 1999. Next year, it expects to grow its fab capacity by 38% to produce 4.7 million 8-in.-wafer equivalents, which will outstrip the world's largest wafer producers, including Intel, TSMC claims.
TSMC last week also said it has begun taking orders for its leading-edge, 0.13-micron process technology, with production slated for early next year. Tseng said the company will initially ramp up its 0.13-micron production at Fabs 3 and 4 in Hsinchu before moving the technology to Tainan.