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Mobile applications will drive silicon industry in Taiwan - Chang

Predicting 10-12% economic growth for silicon over the next ten years, Dr Morris Chang, chairman of Taiwan Semiconductor Manufacturing Company said that the growth of convergence and third generation wireless "will transform most people's lives." And the Taiwan silicon industry will have to adapt, he said.

Key change in the way the industry will have to adapt, he said, is in "rapid ramp up and ramp down" of foundry technologies.

"Product life cycle is likely to be shorter," observed Chang, giving a keynote at Via Technology Forum. "Product differentiation is likely to be more important; product variety is also likely to be more important. Time to market pressure will be higher."

This means that legacy systems have to be managed faster. Not, he emphasised, dumping old technology, but extending its life laterally.

"For both the foundry and our partners, quick production ramp-up is becoming important - and for that matter, quick production ramp-down is important too," said Chang. "It is important to provide a complete solution, silicon platform and product solution, instead of a simple integrated circuit chip. I think via's example of a digital platform is a good one."

With all these challenges, what does TSMC plan to do?

"We plan to broaden our technology offer. We will continue to be a leader in advanced technology, following the Moore's law progression: 90 nm, 65 nm, in late 06 early 07 ramp-up over about two years. And another two years from there, will be at 45 nm nanometres," said Chang.

The industry will also start to emphasise a "lateral spread of technology," Chang predicted. "I characterise the Moore's law progression as a vertical direction; we will also have horizontal spreading of technology, with the more mature technologies - and even .13 is getting mature quickly - so that for example, there will be more new derivatives of .13 that will broaden the applications of a single node."

In the capacity expansion strategy, "we will not only focus on advanced technology, leading edge capacity expansion; we will also pay a lot of attention to the more mature technology capacity expansion," he said.

"Thirdly, we will broaden our service portfolio to provide more design services, and also more back end services. Those are the main ways in which we try to respond to the future market challenges," he concluded. "We see a bright future ahead in terms of growth for the whole semiconductor industry, and for the fabless industry and for the foundry industry. We see this convergence of computer, consumer and communications; we see that digital home is a very bright new growth opportunity."