TSMC's woes with the 40-nm process node have continued into Q4. DigiTimes reports that TSMC CEO Morris Chang has acknowledged the issue, and promises to resolve it by the end of the quarter. From the DigiTimes story:

TSMC said it has seen yield rates for its 40nm node drop to 40% due chamber matching issues. Main customers for TSMC's 40nm processes are GPU vendors AMD, which recently launched its new 40nm-based Radeon 5870 series, and Nvidia, who is scheduled to launch its 40nm-based GT300 series of chips in December, according to previous reports. TSMC's recent issues may impact the shipping schedules of the GPU vendors, market watchers commented.

During TSMC's July 2009 investors conference, Chang revealed that yield rates for 40nm processes had improved to 60%, up from as low as 20-30% in the second quarter of 2009.

With TSMC still suffering from these issues, don't expect supplies of Radeon 5850 or 5870 cards to improve anytime soon. Even if they had a solution to the problem today, we wouldn't see the effect for weeks, so if anything supply is only going to get worse as demand increases thanks to the imminent arrival of games like Modern Warfare 2.

This is also going to make life tougher for NVIDIA, who was hoping to have Fermi ready by the end of the year.

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