MANHASSET, N.Y. The industry's insatiable appetite for consumer electronics and the trend toward 90 and 65-nm process geometries spells good times for the foundry industry, according to Charles Byers, director of worldwide brand management corporate marketing for Taiwan Semiconductor Manufacturing Company.
In an interview with EE Times here Friday (March 31), Byers, part of TSMC’s North American operation in San Jose, cited market data from IC Insights and company reports projecting global industry foundry sales to reach $22.1 billion in 2006, up from $16.8 billion last year.
During the fourth quarter of 2005, foundry revenue was $5 billion, of which TSMC accounted for roughly half, Byers quoted reports as stating. Despite an early-year projection from another TSMC executive of slowing IC growth, TSMC reported strong year-over-year sales in both January and February.
"The trend toward fabless companies and fab-light operations is driving growth," said Byers. "Intel is outsourcing communications chipset manufacturing to us, and there’s increasing outsourcing by integrated device makers (IDMs)."
Byers noted that while communications accounted for the largest chunk of TSMC’s fourth quarter sales at around 40 percent, consumer electronics, at above 20 percent, is the fastest growing sector.
He estimates that by 2010, the average household will have close to 100 consumer electronics devices, with devices such as set-top boxes and MP3 players driving consumption of advanced, highly integrated semiconductors.
In turn, Byers said the consumer market was driving the foundry business toward faster time-to-market, with faster production ramp-up times.
For foundry suppliers, the dizzying pace of activity may be stretching the capabilities of some. A report earlier this month said TSMC was offloading work because it is sold out on manufacturing capacity. While Byers did not directly comment on the report, he confirmed the company was running at full capacity, with many rival foundry providers in a similar predicament.
Much of the activity involves a shifting to 90-nm and 65-nm designs. "90-nm activity has grown over the past four quarters from 1 to 17 percent of revenue," Byers said. He added that more than 115 90-nm tapeouts are now in volume production.
65-nm activity is also booming. TSMC is prototyping a number of 65-nm designs and conducting ongoing process qualification with several customers, including Broadcom, Altera, and Freescale Semiconductor. Volume production is expected by the second half of the year.
The company is also readying a 65-nm design-for-manufacturing program and a new design reference flow for mid-year introduction. The reference flow, designated 7.0, is expected to move more backend elements into the front-end design, which Byers said would help improve yields.
Byers said that despite so-far robust conditions in the foundry sector, TSMC is conservatively maintaining 2006 capital expenditures at $2.6 to $2.8 billion, about even with 2005.
Mindful of past industry downturns, Byers said, "People are on the lookout for overcapacity. In 2000, no one had a good look into the inventory situation."