EETimes is reporting that the 40nm process at TSMC, the same one responsible for the Radeon HD 4770 and both NVIDIA and AMD’s latest mobility GPU offerings, is still having SIGNIFICANT yield problems.

In fact, not only do our checks suggest 40-nm yields but, to our surprise, these have remained below 30 percent, affecting shipments in 2H09,” he said in the report. ”We believe yields are as low as 20 percent to 30 percent, which may explain the recent management change. We think some key customers who are increasing 40-nm tape-outs have already started to evaluate other foundries (UMC) in case yields do not improve soon.

If those yields are even close to accurate, TSMC and its partners must be in a world of hurt and it obviously explains why AMD is having difficulty getting the price and availability of the Radeon HD 4770 worked out.  It also puts into question NVIDIA’s recent move to 40nm on their new GeForce 200M mobility GPUs
Will this giant in the industry put this issue behind it quickly?

I’m sure someone like GlobalFoundries is just chomping at the bit to get in there and take some of TSMC’s customer base but that will have to wait for the next generation of 32nm and 28nm wafers if it is going to happen.   TSMC needs to work on getting this 40nm production issue worked out and QUICKLY to avoid any potential customer loses to competing foundries in the future.