TSMC's 28nm Process Doing Better Than Expected, NVIDIA and AMD Can Rejoice

One of the greatest fears in regards to the graphics card market was that TSMC's 28nm manufacturing process would go through the same problems as the 40nm node, but this will not happen after all.

There doesn't seem to be any problem with the 28nm technology at Taiwan Semiconductor Manufacturing Company.

In fact, yields are reportedly better than the foundry expected, not just satisfactory.

In other words, the production of AMD and NVIDIA GPUs based on the latest node will not be faced with shortages, unlike 40nm chips.

TSMC began production of 28nm chips in the fourth quarter of 2011, but sales were lower than expected.

The company has higher hopes for 2012, with 10 percent of the revenues for the second half of 2012 expected to come from the new technology.

“Our 28nm entered volume production last year and contributed 2% of Q4 2011's wafer revenue,” said Morris Chang, chief executive officer and chairman of TSMC.

“Defect density and progress is ahead of schedule and is better than 40/45nm at the corresponding stage of the ramp-up. We expect 28nm amp this year to be fast and we expect 28nm will contribute more than 10% of total wafer revenue this year.”

Unfortunately, TSMC has been going through a period of weak demand, leading to lower revenues then expected for 2011.

The company continues to be optimistic, but there is no telling how things will progress.

“Although the outlook of the global economy remains uncertain, we expect the demand for our wafers to be stronger than seasonal for the first quarter,” says Lora Ho, chief financial officer of TSMC.

TSMC was going to move from 40nm to 32nm before jumping to 28nm, but it reconsidered it in 2010.

This forced AMD and NVIDIA to keep using 40nm GPUs in their products, but that only meant that they were all the more eager to lunge at the significantly more advanced 28nm node once it came into play.

AMD already has Radeon HD 7000 cards for sale, while NVIDIA is getting ready to release Kepler, which may or may not blow the former out of the water.