Taiwan and international IC designers have advanced fabrication orders with foundry houses to early 2018 to support shipments in the traditional boom season in the second half, amid concerns over insufficient wafer foundry supply. Taiwan Semiconductor Manufacturing Company (TSMC) has decided to adjust its ASIC processing capacity and spread customer orders to various fabs starting in the second quarter to ease expected order-fulfillment jams.

Taiwan MCU supply chain sources said the 8-inch wafer fabs in Taiwan and China will see their capacities stay short of demand for a long period amid the rampant increases in market demand for IoT (Internet of Things) chips. TSMC, United Microelectronics (UMC) and Vanguard International Semiconductor (VIS), and China's Semiconductor Manufacturing International Corp (SMIC) have all seen their 8-inch wafer fabs running at full capacity. And even newer China foundry houses such as Hua Hong Semiconductor and Huali Microelectronics have also seen sharp increases in foundry orders.

TSMC has seen full utilization of its advanced process capacities during the traditional slow season in first-quarter 2018. To counter instant influx of orders from new clients, the company has decided to switch part of ASIC orders to its fab in Nanjing, China, leaving all 12nm process capacities at its fabs in Taiwan to MediaTek and Nvidia. MediaTek has secured the pledge from upstream partners to offer sufficient capacities to support its shipments of Helio 60 chipsets to China smartphone vendors such as Oppo, Vivo and Xiaomi in the second half of the year.

Industry sources said that even Taiwan IC designers in the TSMC Grand Alliance have to line up for a long time before they can secure sufficient more advanced process capacities such as 7/10nm nodes to meet customer demand for diverse AI-based chipset solutions. The sources continued that Apple is expected to step in to vie for foundry capacities in the third quarter of the year to support production of new devices.

By: DocMemory
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