TSMC this week has introduced plans to spend $100 billion on new manufacturing services in addition to R&D over the subsequent three years. The world’s largest contract maker of chips says that its fabs are at present working at full load, so to fulfill demand for its companies going ahead it would want (a lot) extra capability. Among TSMC’s services to go surfing within the subsequent three to 4 years are the corporate’s fab in Arizona in addition to its first 2nm-capable fab in Taiwan.
“TSMC is entering a period of higher growth as the multiyear megatrends of 5G and HPC are expected to fuel strong demand for our semiconductor technologies in the next several years,” a press release by TSMC with the Taiwan Stock Exchange reads. “In addition, the COVID-19 pandemic also accelerates digitalization in every aspect. In order to keep up with demand, TSMC expects to invest $100 billion over the next three years to increase capacity to support the manufacturing and R&D of advanced semiconductor technologies. TSMC is working closely with our customers to address their needs in a sustainable manner.”
$100 Billion to Be Spent on Fabs
TSMC’s capital expenditures (CapEx) finances final 12 months was $17.2 billion, whereas its R&D finances was $3.72 billion, or roughly 8.2% of its income. This 12 months the corporate intends to extend its CapEx to someplace within the vary of $25 to $28 billion, which might make for a 45% to 62% year-over-year enhance in that spending. The firm’s R&D spending can even rise as its income is predicted to develop. In complete, TSMC plans to take a position round $30 billion or extra on CapEx and R&D this 12 months. Taken altogether, if the corporate intends to spend round $100 billion from 2021 via 2023, its expenditures within the subsequent two years can be roughly flat with 2021, one thing that ought to please its traders.
TSMC has numerous essential fab tasks forward of it.
- First up, the corporate must construct and equip its N5-capable fab in Arizona. The facility will value round $12 billion, could have a capability of 20,000 wafer begins per 30 days (WSPM), and can come on-line in 2024. A current rumor signifies that TSMC would possibly really enhance capability of the power and/or equip it for a extra superior fabrication course of, which is able to enhance its value, however TSMC has by no means confirmed this data.
- Secondly, TSMC might want to equip its N3-capable fab in Tainan, Taiwan, which is projected to begin quantity manufacturing within the second half of 2022.
- TSMC’s third capital-expensive venture is the corporate’s N2 (2nm) certified GigaFab in Hsinchu, Taiwan. Furthermore, TSMC is mulling to construct one other N2-capable fab in Baoshan, Taiwan. Meanwhile, TSMC nonetheless has to finish growth of its GAAFET-based N2 node.
- Last however not least, TSMC is ready to construct two extra superior packaging services in Taiwan. The firm already has 4 of such services, but it surely believes that demand for chip stacking and superior packaging will rise sooner or later and it’ll want extra capacities. Chip packaging factories should not as costly as semiconductor manufacturing services, however they nonetheless value quite a bit.
Recently TSMC wrote a letter to its prospects the place it defined that its fabs have been absolutely utilized for a couple of 12 months now and it nonetheless can not meet rising demand for chips. To that finish, the corporate must ‘droop wafer worth reductions for a 12 months from the beginning of 2022,’ in line with a Bloomberg report.
Competition Intensifying
Right now, TSMC is the world’s largest contract maker of chips with no rivals that may match its complete manufacturing capability. A a few of TSMC’s rivals, together with GlobalFoundries and UMC, have pulled the plug on growth of their modern fabrication processes, so the variety of firms that may provide modern nodes has…
