TSMC chairman spells out chip futures

Morris Chang, CEO of the Taiwanese Semiconductor Manufacturing Co (TSMC), earlier this week outlined his company's plans for the future. Chang claimed that Taiwan's chip production already exceeds the combined efforts of Germany, France and Italy and is now the fourth biggest manufacturer. In the next few years, he said, Taiwan will become the third largest producer, knocking South Korea off its perch. He said that companies without their own fabrication plants which currently account for seven per cent of revenues worldwide, are likely to grow to 12 per cent over the next five years. That said Chang, would help to fuel the growth of TSMC, which is a foundry company, with fabs. He said that producing silicon is capital intensive but that Taiwanese companies should be able to achieve a 25 per cent growth rate, compared to an average of 12 per cent worldwide. TSMC, however, wanted to reach 30 per cent net profits, because the capital turnover rate for silicon wafer OEMs is around 50 per cent. ®