Taiwan-based fabless analog IC firms are all expected to carry out their transition to 8-inch wafers in 2012, according to industry sources. The move will help improve their cost structures and narrow the gap with their larger peers such as Texas Instruments (TI), which now makes products using 12-inch wafers, the sources said.

In fact, most Taiwan-based analog IC designers reported declines in both revenues and profits for 2011, due to their less competitive advantage in manufacturing costs and price offerings, the sources indicated.

Richtek Technology and Global Mixed-mode Technology (GMT) started upgrading to 8-inch processing in the second half of 2011, ahead of their domestic peers, the sources observed. The switch to larger wafers will allow the two companies to improve their gross and operating margins from the low levels seen in the fourth quarter of 2011, the sources said.

Richtek has announced revenues for the last quarter of 2011 slid 11.5% sequentially to NT$2.46 billion (US$83 million). Operating profits and pre-tax profits for the quarter were NT$384 million and NT$354, respectively, down 23% and 24.5% on quarter.

Richtek said previously that products built using 8-inch process would account for 40-50% of its overall chips manufactured in 2012, compared to 20-30% in 2011.