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Foundry giant Taiwan Semiconductor Manufacturing Co. Ltd (TSMC) has moved to expand its fab capacity in China.

As reported, TSMC signed a contract with Atmel Corp. Under the terms, TSMC purchased Atmel's 8-inch waferfabrication equipmentfrom its fab in North Tyneside, United Kingdom. The deal totalled $82 million.

''This transaction is part of our 8-inch wafer strategy, and part of the wafer fabrication equipment may be transferred to TSMC [Shanghai], our fully owned subsidiary in mainland China, for capacity expansion next year,'' said C.C. Wei, senior VP of operations at TSMC.

TSMC owns and operates an 8-inch fab in Shanghai, which is based on 0.25µm technology. The company has been scrambling to expand its 8-inch capacity, which is seeing renewed demand in the marketplace.