SAN JOSE, Calif. — Major silicon foundries continue to move ahead with leading-edge 90- and 65-nm processes, but demand for the technologies appear to be miniscule — if not disappointing, according to analysts.
Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC), for example, this week disclosed that only 1 percent of its third-quarter sales are based on its new and leading-edge 90-nm process technology.
While TSMC is ramping up the 90-nm process, the foundry giant is also on track with its 65-nm technology development, said Rick Tsai, president and chief operating officer for TSMC (Hsinchu, Taiwan). The company's 65-nm process will move into "early production" by the end of 2005 or early 2006, Tsai said. He made the comments during the company's conference call to discuss TSMC's third-quarter earnings (see Oct. 26 story).
During a separate conference call, Jackson Hu, chief executive of foundry rival United Microelectronics Corp. (UMC), said that only 2 percent of its third-quarter sales are based on 90-nm processes. UMC (Hsinchu, Taiwan) hopes to realize 5 percent of its sales for 90-nm technology in the fourth quarter, Hu said.
UMC is also looking to deliver 65-nm processes in early 2006, he said.
Meanwhile, Texas Instruments Inc. and China's Semiconductor Manufacturing International Corp. (SMIC) are developing 90-nm process technology. SMIC hopes to have 90-nm "pilot production" withit its foundry fabs in the first quarter of 2005.
However, the 90-nm ramp appears to be disappointing for the foundries, according to observers. High mask and design costs, coupled by the current inventory correction problem, has slowed down the demand for 90-nm designs, according to some observers.
But given that the foundries have just started 90-nm production, the rate adoption for the technology will take some time, said Joanne Itow, an analyst at Semico Research Corp. (Phoenix).
"The foundries have just recently moved into 90-nm production," Itow said. "So it's not surprising [about the current ramp]."
Itow did question the overall demand picture for 65-nm foundry processes, if or when that hits the market in 2005 and 2006. "There are not very many people that will need that," she said. "The volumes will be small for that process."
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