Taipei, June 13, 2012 (CENS)--Morris Chang, chairman of Taiwan Semiconductor Manufacturing Corp. (TSMC), the world's leading contract IC maker, expressed at shareholders' meeting yesterday (June 12) that the U.S. economy will deteriorate but business outlook for TSMC is still promising, citing brisk demand for TSMC's 28 nanometer technology manufacturing service until the third quarter.
K.Y. Lee, chairman of AU Optronics, a lead TFT-LCD maker, echoed Chang's concern over the overall business climate, saying that “bitter days will continue.”
During a press conference after shareholders' meeting, Morris Chang remarked that the U.S. economy deteriorated in the recent two months, as evidenced by the decline of new job vacancies to 68,000 in May and June, down from 200,000 in January and February. In addition, outlook of European-debt crisis is not promising, which will affect U.S. banks and then impact the U.S. economy. However, despite the discouraging outlook of the U.S. economy, demand still overstrains the 28 nm capacity of the TSMC in the third quarter and will still be a bit higher than capacity in the fourth quarter. Demand and supply will not strike a balance until next year. Due to TSMC's leading status for 28 nm technology, the strained capacity will contribute to its operation.
Chang admitted that the downturn of the U.S. economy will have a direct effect on the company's operation, since TSMC derives 70% of its sales from the U.S. Other major markets of the TSMC, in descending order, are mainland China, Taiwan, Europe, and Japan.
Chang also admitted that the company often has discrepancy in its forecast for the general economy and the industry. It, for instance, grossly underestimated the market demand for 28 nm technology service. “If we had known the strong demand for 28 nm technology capacity two years ago, we would have installed more capacity at much earlier time,” said Chang.
Chang is relatively conservative towards the planning of 18” wafer-based fab, due to immaturity of technology and equipment. Globally, only TSMC, Intel, and Samsung are actively stepping into the realm of 18” wafer-based fab.
(by Philip Liu)