Industry sources have confirmed Fudzilla that TSMC’s 40nm process is definitely far from the numbers they should be hitting. It’s been more than a year, probably even year and a half since TSMC started 40nm test production, and even today their yields are extremely poor.

Our sources are quoting numbers close to 50 percent, and in the semiconductor manufacturing business, this would be considered as extremely bad for a mature manufacturing process.

Globalfoundries and AMD usually transition from e.g. 65nm to 45nm in a matter of months and yields would have to be much better to make financial sense.

As for Nvidia and ATI, they are the ones to suffer from TSMC’s bad yields. They will end up buying wafers where 50 percent of chips are dead, and this will put some additional weight on the product price. When yields jump to let’s say 80 percent, Nvidia and ATI can make more money on their products.

Since TSMC is the only company doing 40nm high performance wafers, and UMC and Chartered have 40nm on paper, graphics vendors will be stuck with TSMC’s bad yields for a while.