Taipei, May 8, 2008 (CENS)--Loss at Taiwan Semiconductor Manufacturing Co.`s (TSMC`s) mainland China factory in Shanghai expanded to NT$529 million (US$17.6 million at US$1:NT$30) in the first quarter, compared with loss of NT$127 million (US$4.2 million) in the same period of last year.

Throughout last year, the mainland factory lost NT$957 million (US$31.9 million), higher than loss of NT$637 million (US$21 million) it reported a year earlier.

Industry watchers ascribed the loss primarily to growing maturity of foundry market and a more conservative global economy this year than last.

Although TSMC`s Shanghai factory has suffered losses since it began operation in 2004, the company had after-tax net income of NT$28.1 billion (US$936 million) in the first quarter, far fatter than any of its rivals including United Microelectronics Corp. (UMC), Semiconductor Manufacturing International Co. (SMIC) and Chartered Semiconductor Manufacturing Ltd.

To quickly make the factory break even, TSMC plans to expand capacity at the factory to around 40,000 wafers a month from current 34,000 wafers, so that its can bring cost down.

TSMC delivered refurbished 0.18-micron tools it acquired from Atmel to the factory last year after Taiwan government conditionally allowed Taiwanese chipmakers to transplant the chip-making technology to the mainland last year.

TSMC Chairman Morris Chang recently said his company would not actively proposed that new government lift bans on Taiwanese transplantation of higher-end chip-making technologies to the mainland after it takes office on May 20. However, he said his company would submit applications depending on conditions for government permission to upgrade its Shanghai factory`s technology.

(by Ken Liu)