TSMC comes up short on 28nm chips

TSMC’s ability to create chips using the 28nm process appears to be overstated.

According to DigitimesTSMC’s 28nm foundry capacity has been drastically short of what Qualcomm, AMD and Nvidia want.

Qualcomm is so annoyed that it has had to shift some of its orders to United Microelectronics, and it has not been able to meet its clients’ demand for processors for smartphones and tablet PCs.

The shortage is expected to relax at the end of the third quarter of 2012, according to industry sources.

AMD launched the 28nm-based Radeon HD 7970 in the first quarter of 2012, but has only shipped a small number due to TSMC’s short 28nm capacity.

Nvidia could only get one 28nm-based GPU into the shops. The GeForce GTX 680 appeared late March. It has had to delay the launch of Kepler series GPU models due to the shortage.

Yield rates of its 28nm process are slowly improving, but TSMC is being slow to expand 28nm foundry capacity. Apparently it is worried that if it goes flat out it will not maintain gross margins.

TSMC will start construction of the 5th-phase expansion of Fab 14, its 12-inch fab located at the Southern Taiwan Science Park, on 9 April. TSMC’s total foundry capacity in 2012 is expected to increase by 10 percent from 2011. This could see the problem ease by the third quarter of the year.