The global economic slump causes prices to drop and it is natural that manufacturers tend to decrease manufacturing costs. According to media reports, the necessity to lower production costs forced many fabless chip designers to adopt thinner process technologies at contract makers, such as Taiwan Semiconductor Manufacturing Co.

In spite of anemic chip markets and the forecast that TSMC’s capacity utilization ratio will likely drop to only 75% by the end of Q4 2008, customers have accelerated plans to upgrade to higher-end process by making most of the rising idle capacity at TSMC in hope of paring down costs, reports China Economic News Service.

Leading graphics chip designers, ATI, graphics products group of Advanced Micro Devices, and Nvidia Corp. are expected to be the first to utilize the 40nm process technology of TSMC in order to improve performance of graphics processors. Communication chip developers Altera, Broadcom, Marvell, Netlogic are projected to follow. In addition, companies like Microsoft Corp. and Sun Microsystems are more than eager to adopt the new fabrication process to cut costs.

Neither of the aforementioned companies commented on the news-story.