European Foundry Wafers Growing Fast

In 2008, TSMC grew its sales 30% in Europe which contrasted with TSMC's worldwide growth of 3.3 per cent.

Now you might think that being a better customer to TSMC is not necessarily a positive. To an extent it reflects Europe's IDMs -  ST, NXP and Infineon - reducing their in-house manufacturing capability. But that's not the whole story. A lot of the new business is coming from the European fabless community.

"We're seeing a lot of new ideas from Europe, and a lot of new applications," says Marced, citing, ""Siano, which is doing mobile TV and have been designed in by Dell; Omnifone, which has a chip that facilitates DRM (digital rights management) during information transfers; CamSemi in power management control; Amimom, the wireless HD digital connectivity specialist; Sequans, a leader in Wimax; Icera, the wireless soft modem company which has won two big design-ins; and Movidia, the mobile video processor company."

Europe's leadership in certain areas is also driving its business at TSMC. "The European industry revolves around wireless and automotive", says Marced, "CSR is the leader in Bluetooth; ST and Infineon are the leaders in low-cost solutions in wireless markets; Dialog is the leader in power management ICs for wireless. This is why Europe has been growing."

TSMC, the semiconductor industry's No.1 foundry, had revenues of over $1 billion in Q109 which was 3X the size of the revenues at the world's No.2 foundry, UMC, and about the same as the collective revenues of the ninth largest foundries after TSMC.

TSMC believes the semiconductor industry has turned upwards and plans to hire 30 per cent more process development engineers and 15 per cent more design technology engineers.

TSMC currently has 1200 process engineers, and 600 design technology engineers. Design technology engineers develop design flows and work with the EDA vendors and IP suppliers to prepare new generations of technology.

The upturn is going to come," says Marced, "Q2 is going to be very much on-track with our April guidance, and Q3 will be substantially better than seasonality would say." TSMC's April guidance was that it expected to see revenues up 80% in Q2 compared to Q1.

TSMC has taken to majoring on slightly finer geometry processing than the industry mainstream so, while the industry mainstreams on 45nm, TSMC is running 40nm as its major process.

The same thing is happening at the next node. While most of the industry see the next major node at 32nm, for TSMC the next major process node, starting in production next year, is 28nm.