TSMC to build 450 millimetre wafer factory -

TSMC wants to build bigger silicon wafers that could lower the cost of chip production.

The Taiwan government has approved a request by TSMC to build a new 450 millimetre wafer factory in the central part of the island, with the investment amount valued at $8-10 billion.

TSMC warned that technical difficulties will remain in the next five years so people should not get too excited yet.

Bigger wafers could lower chip production costs. At the moment 300 mm is the largest size possible.

Intel also has plans to invest up to $8 billion to expand high-tech manufacturing facilities in Arizona and build a new site in Oregon, which would be able to produce 450mm wafers.

According to Reuters, TSMC Chairman Morris Chang told his AGM that he expects other rivals such as Samsung to be flat out working on a 450mm wafer.

He said that he would like 18 inches, but the technology is not ready yet. If TSMC can  overcome something that size, it will be a big breakthrough.

TSMC raised its 2012 capital spending to a record high in April. Apparently it has a cunning plan for big acquisitions to squeeze more dosh out of the booming mobile market.

Chang expected TSMC would gain "lots of" business over the next five years from Japan's Renesas Electronics to make chips on a contract manufacturing basis.