Taiwan Semiconductor Manufacturing Company (TSMC) and United Microelectronics Corporation (UMC) have seen a surge in demand for networking and wireless solutions, according to sources at Taiwan-based IC designers. TSMC's 65nm-process capacity has been almost fully utilized, while UMC's average utilization rate at its 8-inch fabs remains at above 90%.

Although demand from the LCD panel sector is expected to decline on seasonality, Taiwan's design houses are likely to experience tighter capacity at their foundry partners ahead of the Lunar New Year holiday in early 2010, the sources indicated. Short lead-time orders for ICs used in set-top boxes (STB), 3G handsets, and WLAN and analog devices have kept capacity at foundries occupied.

MediaTek, Qualcomm, Broadcom, CSR and Atheros have all adopted 65nm node production at TSMC, whose fourth quarter is likely to beat the seasonal pattern, the sources said.

UMC has seen surging demand for STB, TV and WLAN applications, as well as MediaTek's smartphone chips, the sources noted. UMC said at its last investors conference in July that its overall utilization rate for the third quarter would reach 85%. The world's second-largest foundry chipmaker is to unveil its financial results for the third quarter at an investors conference on October 28.