Actually to put a point on the patent issue vs. LU. TSM is surpassed by only IBM, Micron and AMD in semiconductor patents filed in the US year on year. LU is not even in the top 15 filers. They may have a lot of patents but they are not chip based and like you said it has yet to translate into any revenue.
<Life span of most foundries is less than 18 months.>
The lifespan for anything in the chip industry is 18 months. That's the nature of Moore's Law. That's why chip companies, as you probably know, are constantly migrating to finer line width geometries. TSMC and UMC have always had a cost advantage over their peers outside of Taiwan because their cost of capital has been lower. They pay their employees massive share bonuses while actual salaries are quite low. Also, TSMC has the lowest debt to equity ratios among its foundry peers. Chartered, in fact, has a ratio that is twice as high as TSMC and UMC.
<LU obtained 50X more patents than TSM.> This is obviously an apple-to-oranges comparison as TSMC and Lucent are two very different companies. Also, those patents don't seem to be doing Lucent any good at the moment.
As for the NT dollar, you're still ignoring the fact that this is a US dollar-denominated business. It's not that TSMC and UMC will be hurt be the lower NT dollar, it's that they won't see any benefit like their Taiwan counterparts because of their planned equipment purchases. Also, the bigger issue, as I said before, is capacity utilization. What's the sense of rushing to add new capacity when global demand is weak? That's why you can be assured both companies will be pushing out their 12-inch fab plans. They may go ahead with building the shells, but when it comes to equipment installation they'll delay as long as possible.
Also, don't give ���깩, God rest his soul, too much credit for TSMC's success. ��üy once opined that �� alone didn't deserve all the credit for building Taiwan into a technology-driven island, since it took teamwork from all domestic and foreign industries to accomplish the goal. Also, �i���� was being generous when he said, "If it had not been for Lee, TSMC's achievements would never have been possible." TSMC is here today because of money from Philips and the Taiwan government. And I think your timing is a little off because TSMC got started in the 80s, not the 70s.
Also, I asked "Why have the capacity utilization rates at both UMC and TSMC fallen this year?" You spoke at length about Taiwan politics. As I said before, the government has nothing to do with low utilization rates at UMC or TSMC. Chartered Semiconductor in Singapore is evidence of that (unless you also posit that the Taiwan government is responsible for that company's woes as well). But using your contorted logic that the government is responsible for the success or failure of TSMC, we could then argue that the Chen administration is doing a great job because TSMC's utilization rates are higher than Chartered's in Singapore!
<<Most foundries have short life and high capex. Foundry services are the long-term trend.>>
Are you hanjane or wsp in disguise, and like to take my word out of context? Will you buy a 486 PC today? Will you pay $100M for a 0.25 foundry that has a $1B book value? Life span of most foundries is less than 18 months.
<< The [exchange rate] hasn't harmed Taiwan high tech at all.>>
Had you read the TSM annual report before calling me a fool, you would notice that
1. LU obtained 50X more patents than TSM.
2. TSM has high debt/book value ratio, and used the loan to purchase US hardware.
3. TSM has respectable P/E ratio, until you add the loan to its equity.
Back in the 70s, Lee Guo-Ding recognized the potential of semiconductor, and offered incentives to Chang, including low interest rate loans. This is how TSM got started. The LGD theory is to use TSM as the corner stone to jump start ROC high tech industry, and it worked great into the 80s. Since TSM has high debt ratio, and entered long term contract to purchase US hardware, the exchange rate hurts. BTW this is why both UMC and TSMC still plan to go ahead with their 12-inch fab plans.
BS are junior aides selected based on political affiliation rather than capabilities and experience. Every party or company has its own eunuchs, just DPP makes matter particularly worse. ChinaSat fell, and China Steel is next in line. TSM was aware of the rail project, but one BS provided less than accurate data to the foundry designers. What do you expect when DPP replaces Caltech PhD with high school dropouts?
<<What's the difference between copper and aluminum and why is copper better?>>
Cu, Ag and Au are better conductors than Al, and allow the chips 2B smaller and faster. Copper chip is an ancient technology developed by IBM about 4-5 years ago. For more info on Cu, Ta and low k, check the IBM and NVLS web sites. I used the work "ancient" as some of my friends are working on 40GHz chips now with more advanced materials.
<<What's the difference between an 8-inch wafer and 12-inch wafer>>
Info on 200 vs 300 mm foundries can be found on AMAT web site. The main advantages are cost per chip and dust count. The main disadvantages are cost and migration of 200mm equipment to 300mm foundries.
<<Why isn't Morris Chang worried about efforts to set a semiconductor manufacturing industry in China?>>
I do not know about that. He always uses this claim to justify getting a loan from ROC.
<<Why have the capacity utilization rates at both UMC and TSMC fallen this year?>>
I am going to pull a benson: "I met LGD, and President Abian, you are no LGD." DPP and the naives like to claim "let business be business." The problem is that ROC is a small country with limited capitals ($, management and engineering). With a hungry dragon circling, ROC needs to have a united, concerted effort to establish a truly high tech industry, based on its high tech sweat shops. Saber rattling between the Chinese and Fujians does not give the investors a warm and cozy feeling. Chinese Americans are second to nobody in the scientific fields in USA. Why does DPP want the Fujian to be 2nd class, and the Chinese in ROC be 3rd class citizens?
<Most foundries have short life and high capex.>
A short-life? Foundry services are the long-term trend. Ten years from now one of every two ICs will be made at a contract foundry. Where do you think fabless chip companies have their chips made? Why are IDMs increasingly outsourcing to foundries? Do you even know what an IDM is?
I said: Both UMC and TSMC still plan to go ahead with their 12-inch fab plans.
You said: Why? You have no clue how TSM got started.
Hello? Do you know what a non sequitor is? And I already told you TSMC started as a government initiative, later privatized. In addition, TSMC had then and still has the backing of Philips
I said: The [exchange rate] hasn't harmed Taiwan high tech at all.
You said: Read the TSM annual report before calling me a fool.
I guess you don't understand that devaluations boost exports and increase the value of funds brought back into Taiwan. The effects at UMC and TSMC are more limited because they have capital equipment purchase plans. A bigger worry is capacity utilization, but I don't suppose you would know anything about that.
I said the DPP didn't want to build anything next to the new foundry in Tainan.
You said to read the newspaper again.
I suggest you read my answer again (or do you have a problem understanding English?) It was the National Science Council under the former KMT government that thought it was a brilliant idea to run the high-speed rail through the Tainan Science Park. The DPP had nothing to do with it.
If you're so smart, answer these easy questions:
What's the difference between copper and aluminum and why is copper better? Which of the two foundries in Taiwan was the first to use copper?
What's the difference between an 8-inch wafer and 12-inch wafer and why is the 12-inch wafer better?
In what cases would an 8-inch wafer be superior to a 12-inch wafer?
Why isn't Morris Chang worried about efforts to set a semiconductor manufacturing industry in China?
Why are IDMs increasingly outsourcing to foundries?
Why have the capacity utilization rates at both UMC and TSMC fallen this year?
Go find a politics board. Leave this board to discussion on TSMC.
I never said I was Taiwanese, and you know perfectly well that Taiwan's economy is down because of the US. What does Chen's being in office have to do with US IDMs and fabless chip companies cutting back orders to TSMC and UMC? Nothing. Quit spreading your lies.
His old man send him to the US since he was a kid. Like Dirty Song's boy, he did not even serve in the military. He and every CKS cronies are having a tough time facing the fact that their days are over, That is why he cries and howls.