02.19.2001
GaAs wafer outsourcing coming Taiwan's way

• Communication device IDM Conexant (US) has decided to slow down capacity expansion, and to transfer 4-inch GaAs wafer fabrication technology to Tainan Science Park-based Advanced Wireless Semiconductor Company (AWSC, unlisted).

• Back in April 2000, Conexant entered into a multi-year foundry partnership agreement to obtain capacity (30k wafers per month) from AWSC. However, due to the complex technological standards and the high level of reliability involved in compound semiconductor manufacturing, the GaAs wafer qualification process is lengthy. AWSC has reportedly not yet passed Conexant's product certification.

• While the uncertain macroeconomic environment intensifies the bleak outlook for the communications device sector, device makers are showing caution on CAPEX after years of aggressive expansion. Conexant's alliance with AWSC is a good indication of the increasing trend to outsource GaAs to Taiwan. The trend will no doubt help to expedite the establishment of a value chain from epitaxy to IC backend services that is already in the making in Taiwan. Players such as epi-wafer supplier Procomp (2398 'Buo Da') will benefit.

• Fab installation at Procomp's foundry subsidiary, Taiwan Compound Semiconductor Co. (TCSC, unlisted), is progressing well with the support of Mistubishi Electrics (JP) as the technology partner.

LindaLiu@Primasia.com +886-[0]2-2547-8867