New TSMC Chip Development Effort Focuses on Wireless First

The red-hot mobile device industry is pushing chip giant Taiwan Semiconductor Manufacturing (TSMC) to focus its development efforts on low-power technology, a sign the trend to focus on power savings over performance will continue into the foreseeable future.

TSMC is the world's largest contract chip maker, and dozens of chip vendors, including Texas Instruments, Qualcomm and Advanced Micro Devices (AMD) depend on its production technology innovations to enable them to create cutting edge chips.

TSMC's latest improvement in chip production shrinks the components on a chip to the microscopic size of 28-nanometers, down from 32nm. There are about three to six atoms in a nanometer, depending on the type of atom, and there are a billion nanometers in a meter. Size is important because generally, the more transistor components on a chip and the closer they are together, the faster the chip can perform tasks. It also means smaller chips for today's shrinking, thinning devices.

Chip makers such as TSMC and Intel currently mass produce chips using 40nm to 45nm technology.

In the first quarter of 2010 TSMC plans to offer a 28nm production technology that uses silicon oxynitride, which is good for creating chips that require less power and therefore prolong battery life in mobile devices. The company will follow that up in the second quarter with another 28nm process that uses a different technology, high-k metal gate, to boost speed and performance but at greater power usage, according to literature TSMC has made available on its Web site.

The decision to focus development efforts on low-power versus high performance and high power depends on what TSMC customers require, said J.H. Tzeng, TSMC's deputy spokesman.

He declined to comment on which companies were working with TSMC to develop the 28nm technology or what products such chips would be used in.

The information on TSMC's Web site says the 28nm low-power technology is ideal for a range of wireless chips, including cellular baseband, Wi-Fi, and Bluetooth.

The emphasis of low power over performance at TSMC meshes with strong sales growth of mobile devices such as laptops, netbooks and smartphones these days.

Market researcher Ovum predicts smartphone sales will rise 18.7 percent year-over-year in 2009, followed by growth at a 19.5 percent annual rate until 2014 due to a wave of people replacing 2G (second generation mobile telecommunications) handsets with 3G smartphones.

Recent earnings guidance revision at two of the world's biggest mobile phone chip makers, despite the global recession, also highlights the trend.

Qualcomm, the world's largest mobile phone chip maker, last week increased its revenue estimate for its fiscal third quarter to a range of US$2.67 billion to $2.77 billion from previous guidance of $2.40 billion to $2.60 billion and raised its operating income expectations as well.

Texas Instruments also raised its financial guidance last week, citing strength in laptops, mobile phones and communications infrastructure.

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