One of the more unfortunate circumstances to end the month of October is the fact that TSMC has once again run into issues with its 40nm process technology, giving more headaches to its clients overseas, particularly those in the GPU industry.

Nvidia and AMD are both expected to face shipment delays of their latest orders from TSMC due to a resurgence of issues with chip yields. TSMC’s chairman Morris Chang has reported that 40nm yields recently dropped to around 40-percent at the beginning of October, and that the company is working around the clock to quickly resolve the issues before the end of the quarter and before 2010.

TSMC is a vital factor of production for both Silicon Valley graphics processing vendor giants, and given the current state of the 40nm market with the recent launch of the HD 5000-series and Fermi on the horizon, it may be tough for AIB partners to acquire satisfactory amounts of chips to match the holiday season demand.

There have been a number of reports regarding TSMC’s 40nm yield issues over the course of the past few months. During the company’s July 2009 investor’s conference, TSMC chairman Morris Chang revealed that yield rates have actually improved significantly from Q2 2009, where the output of marketable chips were as low as 20 to 30-percent.

"Due to stronger demand for 40nm and 65nm technologies, TSMC 2009 capex has risen further and is expected to be around US$2.7 billion,” said TSMC’s chief financial officer Lora Ho at the company’s recent October 2009 investor’s conference. In perspective, the company’s Q4 2009 capital expenditures on manufacturing equipment may total to be around $1.34 billion, up from $971 million in Q3 2009 and $224 million in Q2 2009.


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