TSMC, UMC likely to lower capex budgets for 2011, says paper

Taiwan's two foundry giants are likely to revise downward their capex goals for 2011 due to worries that orders in the second half of the year may not be large enough to fill their expanded capacities, the Chinese-language Apple Daily cited sources at chip equipment suppliers as indicating on June 22.

TSMC is expected to lower its capex budget this year from US$7.8 billion to US$7 billion, while UMC may cut its 2011 budget to US$1.6 billion from US$1.8 billion, according to the paper.

UMC said last week that its planned capex budget for 2011 of US$1.8 billion remains unchanged. The foundry warned that wafer ASPs might come under downward pressure in the second half of the year due to particularly weak demand.

TSMC during its most recent investors conference reiterated its 2011 capex budget of US$7.8 billion, and added that only upward adjustments would be made thereafter.