July 16, 2010 / 4:58 AM / 7 years ago

UPDATE 1-TSMC says plans $9.4 bln Taiwan plant

* TSMC to invest $9.4 bln in new Taiwan plant, add 8,000 jobs

* Plant to use 40-, 28-nanometre technologies in first phase

* Total 12-inch wafer output to rise to 240,000/mth by yr-end

* TSMC shares slip 0.3 pct, trailing broader market (Adds comments, details, shares prices)

TAICHUNG, Taiwan, July 16 (Reuters) - Taiwan Semiconductor Manufacturing Co (2330.TW), the world's top contract chipmaker, said it will invest more than T$300 billion ($9.4 billion) and add 8,000 jobs in a new plant in Taiwan over the next few years to tap global chip industry growth.

The company's third 12-inch wafer fabrication facility would use advanced 40- and 28-nanometre technologies in phase one, TSMC (TSM.N) Chairman and Chief Executive Morris Chang said on Friday.

"This marks the beginning of a new growth era," Chang said at the ground-breaking ceremony for the new plant in Taichung, central Taiwan.

Although there were worries about a supply glut in the chip sector, TSMC's investment would not add to that concern, some fund managers said.

"There has been a flood of chips using mature technology out there, but those to be made at this new plant are still in strong demand," said Chang Chi-sheng, who manages T$9.5 billion for Uni-President Asset Management. "TSMC has long been the industry leader in technology. An increase of advanced process output will fuel demand among clients."

Major TSMC clients included Broadcom Corp BRCM.O and Nvidia Corp (NVDA.O).

The new project comes days after Intel Corp (INTC.O), the world's largest chipmaker and a dominant supplier of PC chips, posted margin and revenue forecasts that blew past Wall Street expectations. [ID:nN13261502]

TSMC reported record sales for the second quarter on stronger demand for PCs and electronic devices, with the company on track to book a record profit this year. It is set to announce full quarterly results and offer guidance on its business outlook in late July. [ID:nTOE668023]

Despite worries over the debt crisis in the euro zone, Chang has said the global chip maker should remain in good shape in the second half as global chip sales were expected grow about 30 percent this year.

TSMC's new facility was set to begin mass production in the first phase in the March quarter of 2012, said Chang

The company's total monthly output of 12-inch wafers would rise to 240,000 units by end of this year from 200,000, according to a TSMC statement.

TSMC also said it planned to build a solar cell R&D center in the new facility as part of a diversification initiative.

(For an analysis on Taiwan technology companies expanding into the solar sector, see [ID:nTOE65O03Q].)

By 0420 GMT, TSMC shares were down 0.33 percent, while the broader market .TWII was flat. (US$1=T$32.1) (Reporting by Argin Chang and Faith Hung; Editing by Chris Lewis)

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