DigiTimes is reporting that, despite industry concerns for a mild market, TSMC is looking to finalize its 18″ wafer process in 2012.

The migration to a 450mm wafer would ultimately make for significant savings on the per-die cost of fabrication. It’s a matter of throughput, say proponents of the effort. Enabling a foundry to manufacture more chips per unit of time drives down prices by improving supply–in some case dramatically. The switch to 300mm at the turn of the millennium helped Intel quadruple factory output and reduce per-die costs by 30%. Combining increases in wafer size with process shrinks, such as current efforts to perfect 28nm, can magnify results and ROI.

Not everyone is convinced that 450mm wafers are healthy for the industry, however.

“Shifting focus to one thing usually comes at the cost of another. We must set priorities consistent with the interests of the whole industry,” said an anonymous source in a 2007 article in Semiconductor International.

That cost, says opponents, is a focus on new process nodes. The unconvinced are worried that migrating to a bigger wafer comes at a time when the industry should be focusing on making smaller dies. Smaller dies, they say, will have the same supply-enhancing effect without the capital costs of a foundry up-scale.

Others are concerned that today’s depressed market will not sufficiently recover by 2012 to create a demand that will fit the increased supply. This scenario particularly worries bean counters who suffered through a similar event in the wake of the dot com bust. The industry was attempting to switch away from 200mm to the new 300mm wafers, but few firms were shopping for new foundry contracts.

“Clearly the semiconductor equipment manufacturers were the losers in the 200-to-300-mm transition, and there is no rational explanation that I can think of that will change the picture in the 300-to-450-mm transition,” says Robert Castellano of The Information Network, a high-tech research firm. “Only the largest equipment companies with the deepest pockets, who can even afford 450-mm tool development in the first place, will survive.”

At least one large voice plans to sit this one out for now. AMD spinoff GlobalFoundries sees no need for 450mm given opportunities to improve yields at 300mm.

“The rush to 450-mm suggests a lack of ideas for improving fab productivity,” said Thomas Sonderman, GloFo’s VP of Manufacturing Systems and Technology. “At GlobalFoundries, we see a tremendous amount of headroom left in the 300-mm process.”

But Intel, Samsung and TSMC, the industry’s biggest players and primary supporters of the 450mm endeavor, say that the fears are overstated. They agree that continuing the 10-year cycle of improving wafer sizes, a tradition that began in 1991, is essential to avoid industry stagnation.

“There is a long history of innovation and problem solving in our industry that has delivered wafer transitions resulting in lower costs per area of silicon processed and overall industry growth,” said Bob Bruck, VP and GM of Technology Manufacturing Engineering in Intel’s Technology and Manufacturing Group. “We, along with Samsung and TSMC, agree that the transition to 450mm wafers will follow the same pattern of delivering increased value to our customers.”

Proponents also say that the transition to 450mm is largely an economy of scale. Processes, tools and technology invented for the transition to 300mm are technically similar to what is demanded of 450mm.

“Things should be significantly easier on the equipment side. The transition from 200 to 300 mm required going from unautomated to fully automated factories. This was a true paradigm shift — wafers going into FOUPs — a big change,” says Intel Fellow Peter Silverman.

“Going from 300 to 450 mm is merely scaling. Many current automation schemes will be reusable, particularly software, which was a major hurdle going to 300 mm. From a technical perspective, there’s nothing to be concerned about.”

TSMC’s confirmation of a 2012 process tape-out is a sign that the industry’s major players are set in their ambitions. It’s unclear what impact the switch will ultimately have on the industry at large, but at least cheaper chips are in store for consumers come 2013.