With more LCD driver IC firms moving from 8-inch wafers to 12-inch, backend service provider Chipbond Technology is set to expand capacity for 12-inch wafers in 2011, according to company chairman Fei-Jain Wu.

More driver ICs require 12-inch wafer processing as they become smaller and more highly-integrated for today's new smartphones and mobile applications, said Wu. Chipbond has seen a growing number of chip design customers adopting 12-inch technology to lower production costs, Wu indicated.

Chipbond is expected to obtain orders from at least three new clients in the second half of 2011, Wu said. The company will use the majority of 2011 capex to expand capacity for 12-inch wafers, Wu added.

Chipbond's capex budget for 2011 is estimated at NT$1 billion (US$34 million), according to Wu.

Industry sources speculate Japan's Renesas, Taiwan-based Novatek Microelectronics, ILi Technology (Ilitek) and Orise Technology are now among the major clients for Chipbond's 12-inch backend production. Chipbond's total production capacity for 12-inch wafers will likely top 20,000 units a month by the end of 2011 from the current 15,000, the sources said.

Wu previously revealed that Chipbond had added more gold-bumping lines for 12-inch wafers with new capacity coming online in May 2010. Monthly output for its 12-inch gold bumping services would climb to 15,000 wafers from 7,000 originally.

In addition, Chipbond has developed a replacement option for the existing gold bumping process to reduce the impact of gold metal pricing, according to Wu. The company expects to move the new technology to volume production during the second half of 2011, with plans for commercial output as early as 2012, said Wu.