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.
DIVIDED VIEWS: Although the Fed agreed on holding rates steady, some officials see no rate cuts for this year, while 10 policymakers foresee two or more cuts There are a lot of unknowns about the outlook for the economy and interest rates, but US Federal Reserve Chair Jerome Powell signaled at least one thing seems certain: Higher prices are coming. Fed policymakers voted unanimously to hold interest rates steady at a range of 4.25 percent to 4.50 percent for a fourth straight meeting on Wednesday, as they await clarity on whether tariffs would leave a one-time or more lasting mark on inflation. Powell said it is still unclear how much of the bill would fall on the shoulders of consumers, but he expects to learn more about tariffs
NOT JUSTIFIED: The bank’s governor said there would only be a rate cut if inflation falls below 1.5% and economic conditions deteriorate, which have not been detected The central bank yesterday kept its key interest rates unchanged for a fifth consecutive quarter, aligning with market expectations, while slightly lowering its inflation outlook amid signs of cooling price pressures. The move came after the US Federal Reserve held rates steady overnight, despite pressure from US President Donald Trump to cut borrowing costs. Central bank board members unanimously voted to maintain the discount rate at 2 percent, the secured loan rate at 2.375 percent and the overnight lending rate at 4.25 percent. “We consider the policy decision appropriate, although it suggests tightening leaning after factoring in slackening inflation and stable GDP growth,”
Greek tourism student Katerina quit within a month of starting work at a five-star hotel in Halkidiki, one of the country’s top destinations, because she said conditions were so dire. Beyond the bad pay, the 22-year-old said that her working and living conditions were “miserable and unacceptable.” Millions holiday in Greece every year, but its vital tourism industry is finding it harder and harder to recruit Greeks to look after them. “I was asked to work in any department of the hotel where there was a need, from service to cleaning,” said Katerina, a tourism and marketing student, who would
i Gasoline and diesel prices at fuel stations are this week to rise NT$0.1 per liter, as tensions in the Middle East pushed crude oil prices higher last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices last week rose for the third consecutive week due to an escalating conflict between Israel and Iran, as the market is concerned that the situation in the Middle East might affect crude oil supply, CPC and Formosa said in separate statements. Front-month Brent crude oil futures — the international oil benchmark — rose 3.75 percent to settle at US$77.01
RSS