TSMC begins to ship 20nm wafers to customers, expects very rapid ramp

Taiwan Semiconductor Manufacturing Co. said this week that it had begun to ship the first wafers processed using its 20nm fabrication technology to customers. The company began mass production of chips using 20nm manufacturing process in early January, the first commercial wafers were shipped to undisclosed customers in June. The contract maker of semiconductors expects very rapid ramp of the new node.

“After two years of meticulous preparation, we began volume shipments of our 20nm wafers in June,” said Morris Chang, the chairman of TSMC, during a conference call with investors and financial analysts.

Since TSMC is the first foundry to offer 20nm process technology, it expects to grab a “overwhelmingly large share in 2014, 2015 and onwards.”

If everything goes according to TSMC’s original plans, the company manufactures chips using 20nm process technology at certain modules of fab 12 and fab 16 as well as at the third and fourth modules of the fab 15.

The contract maker of chips expects 20nm wafers to account for 10 per cent of its wafer revenue in the third quarter of 2014 and 20 per cent in the Q4.

“The steepness of our 20nm ramp sets a record,” said Mr. Chang. “We expect 20nm to generate about 10% of our wafer revenue in the third quarter and more than 20% of our wafer revenue in the fourth quarter. And we expect the demand for 20nm will remain strong and will continue to contribute more than 20% of our wafer revenue in 2015.”

It is believed that TSMC makes Apple’s next-generation A8 chips using the 20nm manufacturing technology, which is why the ramp is so quick.

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KitGuru Says: While TSMC’s 20nm process technology will inevitably earn a lot of money for the company, there are rumours that many customers are not really happy with the 20nm node optimised for system-on-chips. It remains to be seen for how long the node will be used.

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