TSMC is denying the tie-up, which was reported in local media Wednesday (May 19), but said it is being forced to outsource some of its orders.

"From time to time, when we need urgent capacity, we may seek help from other fabs, which will include Macronix," said TSMC spokesman Jing-hao Tzeng. There is no cooperation between the companies now, he said.

Traditionally, Vanguard International Semiconductor has been the local partner for TSMC, and, until several months ago, TSMC Chairman Morris Chang headed up the board at Vanguard. The company was mentioned as a proxy for a possible TSMC investment in Macronix, something that Tzeng also denied.

"We do not have any plans to purchase Macronix [shares], he said, alluding to claims in a local media report.

Some analysts looked favorably on a loose alliance, similar to the one already in place that calls for occasional outsourcing, but not something formalized through a cash injection. "TSMC is still investing in 8-inch capacity because customer demand for those wafers is very, very strong," said Chris Hsieh, semiconductor analyst at ING Barings.

"But it doesn't make long-term sense to build up 8-inch, so they are looking for a temporary solution. That is Macronix and Vanguard, which is one of the only companies expanding capacity for LCD drivers."

By: DocMemory
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