TSMC 40nm supply tightens on growing demand from MediaTek

http://www.digitimes.com/news/a20120809PD221.html

Cage Chao, Taipei; Jessie Shen, DIGITIMES [Friday 10 August 2012]

Demand for MediaTek’s smartphone chips, which are mainly supplied to China-based clients, has been growing causing Taiwan Semiconductor Manufacturing Company’s (TSMC) 40nm foundry capacity to be tight, according to industry sources.

MediaTek has received a pull-in of orders for its dual-core processors and 4-in-1 connectivity combo chips from China’s smartphone sector since June, the sources indicated. However, 40nm manufacturing capacity at its foundry partner TSMC is running short of demand, leading to the chip shortages, the sources said.

With TSMC’s tight supply of 40nm chips, shipment delivery times to customers have been extended to more than eight weeks, the sources pointed out.

The short supply of MediaTek’s smartphone solutions has also encouraged the chip holders to sell at a high prices to earn profits, the sources observed. For instance, some chip traders reportedly sold the MediaTek MT6577 solution for more than US$20 on the gray market in China. The chip is quoted by MediaTek at only about US$10.

In response, MediaTek said that the company is not pleased to see any traders sell its chips at higher prices for their own. For the chips that are in tight supply, MediaTek has expressed urgent demand for additional support from its foundry partners, the fabless chipmaker noted.

MediaTek added that with foundries ramping up their production capacity, its chip shortages should be eased between early August and late September.

MediaTek previously revised upward its forecast for 2012 smartphone-chip shipments to 95 million units.

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