It is no secret that TSMC botched the 40nm process. Badly. There is little doubt that this is playing well in favor of GlobalFoundries, Abu Dhabi-AMD powered joint-venture since TSMC's current key customers aren't happy at all.
During Computex, execs from TSMC were trying to convince the partners and the public that they had issues with 40nm bulk process, but that the situation was resolved just prior to Computex and that everything is "fine". Hence the whole thing with the DirectX 11 silicon wafer handout between Rick Bergman of AMD and John Wei of TSMC fame.
However, the situation is still far from being rosy. German site ATI-Forum recently reported that the situation with yields still persists at TSMC, and that was enough for us to fire couple of people "in the know". The feedback we got back varied from "not at a production levels yet" to "still f****d up".
We do have to warn you that there is a big difference between the ways how ATI and nVidia deal with TSMC. From one side, you have a customer that buys silicon per chip, and that customer doesn't give a rat's behind about the yields - since they only pay for the received chips. On the other side, you have a customer that buys complete wafers, and if the yields are not good - your profit margin is shot to hell.
For now, ATI looks to be in better position with TSMC, but until the situation resolves, TSMC will have a tough time to do their Shawshank Redemption-style return to glory. Otherwise, we can see nVidia and many other key customers like BroadCom, Marvell, Qualcomm joining the ATI boat [their GF link is a given], reducing their manufacturing share at TSMC and slowly departing the shores of the Formosa Island for Dresden, Germany.
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