More on Foundry Capacity Utlization: The View From Taiwan Semiconductor (TSM, AMAT)

Includes: AMAT, TSM
by: William Trent, CFA

We cautioned on Wednesday that positive comments on foundry capacity utilization should be taken with a grain of salt. Yesterday, DigiTimes reported that foundry Taiwan Semiconductor (NYSE:TSM) has moved its 65nm process into volume production. (65 nm is the width of the etching, which is narrower than the previous 90 nm generation and thus squeezes more circuits on each chip.) According to the article:

TSM anticipates it will start manufacturing mixed signal and DRAM on 65nm, said Tsai during TSM’s previous investors conference. The foundry also plans to move high-speed ICs to 65nm production in the second half of 2006, he said at the conference.

Sounds like if they do have tight capacity now, they won’t for long.

TSM 1-yr chart:

Taiwan Semi 1-yr