Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said it was increasing its capital expenditure to about US$9 billion next year amid expectations that an improving global economy would stimulate electronics consumption and drive up chip demand.
The forecast capital spending for next year represents another record-high for the Hsinchu-based company. For this year, TSMC, the world’s biggest contract chipmaker, has budgeted US$8.3 billion for spending on new equipment.
Spending on research and development would expand to US$1.6 billion next year, up about 17 percent from US$1.37 billion this year, TSMC chairman and chief executive Morris Chang (張忠謀) said in a speech at the annual Supply Chain Management Forum in Hsinchu.
Chang said global GDP growth is forecast to improve to 2.6 percent, from this year’s estimated 2.4 percent expansion.
Benefiting from a better global economy, semiconductor revenue is expected to grow 3 percent next year, recovering from a projected 2 percent decline this year, he said.
TSMC would quicken its growth pace with revenue increasing by 15 to 20 percent year-on-year next year, from 19 percent this year, outpacing the semiconductor industry’s forecast growth of 3 percent and chip design industry’s 9 percent.
About one-third of TSMC’s revenue next year would come from 28-nanometer chips, Chang told investors in October.
His forecast largely matched Credit Suisse analyst Randy Abrams’ forecast that the company would expand its revenue by 18.72 percent to NT$654.43 billion next year from his estimate of NT$506.03 billion for this year.
Daiwa Capital Markets analyst Eric Chen (陳慧明) predicted a 12 percent annual increase next year.
“We have captured the opportunities that the third wave of killer applications [smartphones and tablets] represent to us,” Chang said, explaining why TSMC and its chip design clients were expected to recover quickly from the downturn.
He said a fundamental reason is the company’s creation of a “grand alliance,” which it has nurtured since its establishment. This alliance refers to its relationship and collaboration with materials and equipment suppliers, customers and intellectual property providers.
Qualcomm Inc and Nvidia Inc are among TSMC’s clients. The two have earlier complained that supply constraints for 28nm chips at TSMC was limiting their growth this year.
To cope with customers’ demand, TSMC would continue to ramp up 28nm production next year, Chang said, adding that he expected all lines to be running at full capacity throughout next year.
At present, TSMC can produce 68,000 12-inch wafers using 28nm process technology per month, he said.
He expected the company to fully catch up with customers’ demand this year, he added.
Commenting on the speculation that TSMC might build a plant in New York, Chang said the company was looking for a place to set up a factory.
“The US is one of the places under consideration,” Chang said. “But this has nothing to do with Apple.”
Apple Inc recently announced it was moving some production lines to the US.
Tesla Inc temporarily halted some production at its auto assembly plant in California because of problems with its supply chain, but work has begun to resume, CEO Elon Musk told employees in an e-mail on Thursday. “We are experiencing some parts supply issues, so took the opportunity to bring Fremont production down for a few days to do equipment upgrades and maintenance,” Musk said in an all-staff message seen by Bloomberg. The factory was “back up and running as of yesterday,” and would rapidly ramp up to full production of Model 3 and Model Y cars “over the next several days,”
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is expected to post a 25 percent year-on-year increase in sales in the first quarter of this year to US$12.91 billion, up from US$10.31 billion a year earlier, as its production is at full capacity, market advisory firm TrendForce Corp said in a note last week. The increase would help TSMC cement its leadership in the industry by taking a 56 percent market share in the global pure wafer foundry business, TrendForce said. Its forecast was in line with TSMC’s estimate in January, which pointed to a range of US$12.7 billion to US$13 billion for the
MULTI-USE: The arrangement of seats in future vehicles would be different, allowing passengers to do everything they do at home, the CEO of the firm’s EV platform said Electric vehicles (EVs) developed on a Hon Hai Precision Industry Co (鴻海精密) platform would be built like “a smartphone on a different platform,” Jack Cheng (鄭顯聰), chief executive officer of the Hon Hai-initiated MIH Open Platform Alliance, said on Saturday. It would be the ultimate goal to make vehicles built on the platform an extension of the driver’s home, he said during an online presentation. The alliance aims to provide resources to automakers and boost Taiwan’s EV development, with a vision to make an EV its owner’s “second home,” Cheng said. “Whatever they can do in their home, they will be able
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) was on Thursday set to sell local currency bonds, as it prepared for a spending blitz amid a global chip shortage. The world’s largest contract chipmaker planned to price about NT$16 billion (US$565.25 million) of notes in three parts in an auction, though the actual issuance size might change. The manufacturer would have to contend with a recent rise in rates globally that has sent many corporate bond yields up from record lows in the past few weeks. The debt offering comes at a promising time for the semiconductor industry as the world scrambles its way