"You build a fab, fab will not come online two year or three years from now. "We are not currently the 40 nm node" said Kevin Zhang, senior vice president of business development at TSMC. And, in an effort to consolidate production of these chips around fewer and more widely available/expandable production lines, TSMC would like to get customers using old nodes on to the 28nm generation. As the final (viable) generation of TSMC's classic, pre-FinFET manufacturing processes, 28nm is being positioned as the new sweet spot for producing simple, low-cost chips. This is why TSMC's plan to expand production capacity for mature and specialized nodes by 50% is focused on 28nm-capable fabs. Which is to say that there isn't the profitability (or even the equipment) to build new capacity for such old nodes. But the cheap wafer prices for these nodes comes from the fact that they were once, long ago, leading-edge nodes themselves, and that their construction costs were paid off by the high prices that a cutting-edge process can fetch. Mature nodes are cheap, have high yields, and offer sufficient performance for simplistic devices like power management ICs (PMICs). For other foundries, the share of revenue earned on mature process technologies is higher: UMC gets 80% of its revenue on 40 nm higher nodes, whereas 81.4% of SMIC's revenue come from outdated processes. Nowadays TSMC earns around 25% of its revenue by making hundreds of millions of chips using 40 nm and larger nodes. As a result, TSMC has recently begun strongly encouraging its customers on its oldest (and least dense) nodes to migrate some of their mature designs to its 28 nm-class process technologies. But on the manufacturing side of matters there's a hard bottleneck to further growth: all of the capacity for old nodes that will ever be built has been built – and they won't be building any more. On the execution side of matters, those chips still do their jobs as perfectly as the day the first chip was fabbed which is why product manufacturers keep building more and more using them. We tend to discuss leading-edge nodes and the most advanced chips made using them, but there are thousands of chip designs developed years ago that are made using what are now mature process technologies that are still widely employed by the industry.
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