TSMC seeks 99% stake in U.S.-based WaferTech, plans next 300-mm fab

TSMC seeks 99% stake in U.S.-based WaferTech, plans next 300-mm fab
HSINCHU, Taiwan --In a move to increase its foundry capacity and services in North America, Taiwan Semiconductor Manufacturing Co. Ltd. here today announced plans to increase its ownership in U.S.-based WaferTech LLC to 99% from its current stake of 66.89%.

Four-year-old WaferTech in Camas, Wash., is a joint-venture foundry company between TSMC, Altera Corp., Analog Devices Inc., and Integrated Silicon Solution Inc. (ISSI). WaferTech's 8-inch fab is capable of processing 281,700 wafers a year, and TSMC officials have hinted that additional capacity could be added to the site in the future.

TSMC today said it has been negotiating with its partners to increase its ownership in WaferTech. The company's board of directors has approved a maximum offer of $6 per share, or about $500 million in total, to acquire additional interest in the joint-venture fab. The potential payments to Altera, Analog Devices, and ISSI were not immediately available.

San Jose-based Altera today confirmed negotiations with TSMC, but the company said it has not reached a final agreement. Altera said it views the potential sale of its interest in WaferTech as being favorable. A final agreement could be reached in the fourth quarter of 2000 or first quarter 2001, said the supplier of programmable logic. Financial details on the transaction will not be released until an agreement is completed, said Altera.

A spokeswoman for TSMC said the foundry company decided to increase its ownership in WaferTech to give it more flexibility in expanding its presence in North America.

Also during this week's broad meeting, TSMC's directors approved capital expenditures for design and construction of a new 300-mm wafer fab, designated Fab 15, in the Tainan Science-Based Industrial Park. The 300-mm (12-inch) wafer fab will be built near TSMC's existing Fab 6, which was opened in the Tainan industrial park earlier this year to process 200-mm wafers for foundry customers and begin pilot production of 300-mm substrates (see March 30 story). TSMC's is now setting up Fab 14 as a 300-mm volume production facility in Tainan, which is located in southern Taiwan.

The Fab 15 facility has been on the drawing boards as part of TSMC's 10-year expansion plan. The basic construction work for Fab 15 is expected to begin before the end of this year. TSMC has secured 40 hectares of land in the new park to build a total of six fabs in Tainan, which is located about 150 miles south of Hsinchu--the current hub of Taiwan's chip industry.

The board approved NT$3.4 billion ($107 million) for the design and initial construction phase of Fab 15 and other projects, including dormitory and an employee activity center in Tainan as well as expanded emergency generators.

TSMC said it is increasing its electrical generator capacity with the goal of providing "non-interrupted foundry services to its customers." Electrical power and infrastructure remains a concern in Hsinchu as well as Tainan, especially after Taiwan's government decided to drop plans for a fourth nuclear power plant (see Oct. 30 story).

The board of directors at TSMC also approved $50 million for a venture capital company to fund activities that will be beneficial to both the silicon foundry company and its customers.