TSMC Faces Acute 28 nm Capacity Shortage

[btarunr]

Taiwan's premier semiconductor foundry, TSMC, is reportedly facing an acute shortage in 28 nm manufacturing capacity. This shortage is expected to relax in Q3, 2012, according to sources. Qualcomm, AMD, and NVIDIA are the three biggest patrons of the 28 nm process, Qualcomm uses it to manufacture performance ARM application processors, while AMD and NVIDIA use it for their new generation GPUs. Although launched at the very end of Q4 2011, AMD's HD 7970 shipped a relatively small volume due to low manufacturing capacity. NVIDIA launched only two 28 nm GPUs, the GTX 680, and GT 640M, and has had to delay launch of more models, due to this reason, according to source. Qualcomm, meanwhile, shifted some of its orders to UMC.



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[NC37]

Again...almost every time I see news about them, it is bad news of some form. Production problems or unable to meet demand. How are competitors not capitalizing on this?

 

[Aquinus]

Again...almost every time I see news about them, it is bad news of some form. Production problems or unable to meet demand. How are competitors not capitalizing on this?

Because competitors are having the same problem?

 

[Deleted member 3]

Again...almost every time I see news about them, it is bad news of some form. Production problems or unable to meet demand. How are competitors not capitalizing on this?

How is it bad news? Selling all your stock is a good thing. So not having enough capacity could just mean they're doing good business.

 

[DarkOCean]

soo this means they can jack prices up on 28 nm parts and everything is ok right?

 

[AsRock]

soo this means they can jack prices up on 28 nm parts and everything is ok right?

Yes but the fail rate all so adds to cost too. I would like to know the fail %.

 

[woopadidoo]

How is it bad news? Selling all your stock is a good thing. So not having enough capacity could just mean they're doing good business.

If a (oh no, car analogy!) car manufacturer had acute manufacturing capacity of say 10 cars a day, and calling it doing good business is well within acute twisted reasoning/logic.

 

[Kreij]

If they expect the capacity problem to be temporary (as the OP states) it doesn't make sense to invest millions of dollars to increase the capacity for 28nm if in that time period you don't project to have a stellar ROI.
Better to just run at full capacity with shortages and when the demand slows, still be running at full capacity and not end up with idle equipment.

 

[Deleted member 3]

If a (oh no, car analogy!) car manufacturer had acute manufacturing capacity of say 10 cars a day, and calling it doing good business is well within acute twisted reasoning/logic.

Unfortunately a car analogy is pointless here, though to reply to it anyway, what was the original capacity? The article doesn't say capacity acutely lowered because some plant blew up. Seems demand went up a lot faster than they could handle. Meaning they can sell 100% of their capacity which isn't a bad thing. Not for them, in the short term anyway.

 

[Prima.Vera]

Because competitors are having the same problem?

Never heard on Samsung, IBM or Intel to have so many issues...:shadedshu

 

[Patriot]

Samsung... arm vs high end gpus...

And Intel serves themselves so they can decide to delay a launch because "there isn't enough competition" ...
IB delayed 3x now.

 

[eidairaman1]

Seems chinese fab plants are having way too many issues. Time for AMD to go IBM/GLOFO

 

[Casecutter]

soo this means they can jack prices up on 28nm parts and everything is ok right?

They already did that back in Aug 2011 by 20-25%, long before AMD/Nvidia had caught wind that TSMC (again) was going to have these problems once actual production started. Once TSMC got moving fulfilling AMD then Nvidia orders crap goes wrong and shortages kill the best laid plans. This is just confirmation that as reported by others that TSMC had already stop production to completely source and fix the problem(s) several weeks ago. Here's the problem with say AMD going with Glo-F, if they have issue in production while TSMC doesn't, you let your competition skip ahead, if they both stay with TSMC they both live and die by the same master.

I see the price increase and chance of low yields as to Nvidia stopping a GK100. If it was a big die, the price increase and the amount yield (because I believe Nvidia buys the entire wafer, not good chips... correct) that would have really impacted their ability to supply what has already kind of turn into a expensive top-shelf product line (there was such a push back on AMD at $550) that Nvidia really knew even with Boost (and components and PCB) to control a GK100 part it was never going into the market for less than $600 and no matter the performance, they might not get a good ROI if thing went right... if they went wrong like this they would've really been up a creek... today. They did the right thing after they heard that TSMC would not be providing the normal encomic’s that most every shrink have provided in past times.

 

[Andy77]

what was the original capacity? The article doesn't say capacity acutely lowered

This: AMD's HD 7970 shipped a relatively small volume due to low manufacturing capacity. NVIDIA [...] has had to delay launch of more models, due to this reason,

 

[xenocide]

Seems chinese fab plants are having way too many issues. Time for AMD to go IBM/GLOFO

GloFo was part of the reason Bulldozer took so long. TSMC is the only place that isn't Intel running sub-30nm production on a large scale. I believe GloFo is working on it, but I am almost 100% positive IBM isn't. That's the issue with being on the bleeding edge of technological capabilities, you have to deal with these kinds of issues.

This: AMD's HD 7970 shipped a relatively small volume due to low manufacturing capacity. NVIDIA [...] has had to delay launch of more models, due to this reason,

Nvidia is building a decent stockpile of their lower offerings before releasing them. AMD did a paper launch so they could announce it when the initial shipments came in, and wait for more to come while the hard launch day approached. Nvidia doesn't want to launch without product on shelves. They are hoping it will fly right off the shelves none-the-less.

 

[imitation]

If a (oh no, car analogy!) car manufacturer had acute manufacturing capacity of say 10 cars a day, and calling it doing good business is well within acute twisted reasoning/logic.

Ferrari shipped an average of eighteen cars a day in 2010. Yet they have 2700 employees and made almost two billion Euros that year. I'd call that doing damn good business.

 

[W1zzard]

tsmc is worth 80 billion dollars, their stock price has been going up nicely. so it's working well for tsmc

 

[TheoneandonlyMrK]

wasnt TSMC expanding its 28nm production facillities ,due to come online Q3_4 2012 , they will be getting orders all over the show since telecoms chip manufaturers have jumped on the node bandwaggon too now due to higher com chip speeds and bandwidths etc

 

[cadaveca]

How is it bad news? Selling all your stock is a good thing. So not having enough capacity could just mean they're doing good business.

+1.

AMD has launched the full 7-series line, Nvidia has launched a couple of chips, but it's being made known that TSMC doesn't have the capacity for Nvidia to release more chips.


As far as I am concerned, TSMC has no problems with 28nm. Just certain partners already bought up all the wafers.

wasnt TSMC expanding its 28nm production facillities ,due to come online Q3_4 2012 , they will be getting orders all over the show since telecoms chip manufaturers have jumped on the node bandwaggon too now due to higher com chip speeds and bandwidths etc

Yes, and this is why there is news we must wait until the fall for GF110 from nV, becuase TSMC does not have the capacity to produce more chips to allow nV to ahve stock of this design. This is a good news item for TSMC, that has a bit of bad news for NVidia, and that is all.

 

[Casecutter]

AMD did a paper launch so they could announce it when the initial shipments came in

What exact product are you talking about Tahiti, Pitcairn, Cape Verde?

I think the Pitcairn is they one the release 2 weeks before intail stock and now no issues. I'd rather see that then dribble what's a drop in the bucket of orginal refererance cards then wait 3... weeks or whatever till AIB bring their higher priced "customs" to market. For Nvidia to drop what probably maybe 1200 in the worldwide market to claim that it's not a "paper launch then cards in two weeks" beats a "soft launch" with no definite stocking dates.

 

[Prima.Vera]

Samsung... arm vs high end gpus...

What does this have to do with anything???:shadedshu

 

[Andy77]

Nvidia is building a decent stockpile of their lower offerings before releasing them. AMD did a paper launch so they could announce it when the initial shipments came in, and wait for more to come while the hard launch day approached. Nvidia doesn't want to launch without product on shelves. They are hoping it will fly right off the shelves none-the-less.

That made no sense whatsoever! If you're PR'ing for nvidia you did a lousy job.

NV moaned they don't do paper launches but seeing how all 680's on newegg are out of stock, never mind my local shops having a very limited supply of one brand out of three, how is that better than AMD's 7900, 7800 and 7700 being available for purchase, and also calling AMD a paper-launch company.

Anyway... keep insisting on your views but the quote I posted above from the article is saying plain and clear that availability is terrible, which answers the original question: yes, it is lower, and it will continue to be on the low until Q3. This is in line with what Charlie Demerjian posted a while back about TSMC shutting down lines... THIS is exactly what happens if lines are getting shut down, no matter the PR or any denial of such events by TSMC.

 

[vega22]

am i the only 1 thinking this is just to scare people into buying at inflated prices?

i mean its not like there are fabs on every corner under cutting each other as its a hefty investment to build the latest fab tech.

 

[Benetanegia]

NV moaned they don't do paper launches but seeing how all 680's on newegg are out of stock, never mind my local shops having a very limited supply of one brand out of three, how is that better than AMD's 7900, 7800 and 7700 being available for purchase, and also calling AMD a paper-launch company.

Because a paper launch is when you review your products and don't sell them after a later date. AMD paper launched HD7970 because they made reviews in December, but retail availability didn't happen until January.

In practice the effects on us are the same and IMO both AMD and Nvidia should have released less GPUs at a time in order to ensure proper availability (and fair prices). Intead they chose to take advantage of the situation and make a bigger profit, rising prices and using the shrtage as an excuse.

am i the only 1 thinking this is just to scare people into buying at inflated prices?

No.

 

[m1dg3t]

This was expected, based on the new's posted a week or so ago about TSMC expanding their facilities. I think Nvidia had them make this statement to quell all the fuss about the lack of 6xx series GPU's on the market.

Regarding "paper launches" both companies do it, they always have and they always will! Get used to it, if you haven't already At least this time ATi was able to bring their product to market within a short enough time of announcing it, think it was 2 - 3 week's between announcing & availability, hopefully thing's improve as i'd like to see actual competition instead of what we have now