This expansion is mainly to satisfy rapid growth in the demand for Internet of Things (IoT) applications in China. Because IoT manufacturing primarily requires 8-inch silicon wafers, TSMC and UMC both are leading the way in expanding their 8-inch production capacities.

In response to China’s demand for better silicon wafer production capacities, part of TSMC’s US$11.5 billion to US$12 billion capital expenditures in the Songjiang factory will be geared towards attaining the goal of expanding its production capacities.

Currently, the TSMC Songjiang factory primarily manufactures products requiring high-pressure special processes, such as micro-controllers (MCU), smart cards, and embedded single chips (SoC). Its manufacturing is concentrated on 0.15 to 0.18 microns, and as soon as the expansion of its production capacity is complete, it will be a major 8-inch wafer factory in China that will produce over 100,000 wafers in a few months.

However TSMC also emphasized that this year’s revenue growth will still be primary from the production of 28 and 20 nanometers. 16 nanometer manufacturing will not begin sales until the fourth quarter; however, the combined 28/20/16 production sales are expected to exceed last year’s sales.

As for UMC, the Suzhou Hejian factory current monthly 8-inch production capacity is over 40,000 wafers, and it is expected to increase by 11,000 wafers in order to satisfy demand for panel driver and power management chip applications. The total monthly production capacity will be increased to 60,000 wafers.

(TR/ Phil Sweeney)