Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said it plans to spend another US$14 billion to US$15 billion next year as accelerating deployment of 5G networks boosts demand for its advanced chips.
The company told an annual supply chain forum in Hsinchu that the planned capital expenditure — the same as this year’s level — would mainly be used on new facilities and equipment.
More than half of the spending increase will be earmarked for the mass production of chips using its 5-nanometer technology, TSMC said.
“The acceleration of 5G deployment across the world is leading to much stronger demand for our 7-nanometer and 5-nanometer capacity,” said J. K. Wang (王建光), senior vice president of TSMC’s operations and fab operations. “As a result, we [in October] raised capital spending for 2019 by US$4 billion. We expect next year’s capital spending will be at a similar level.”
5G technology provides low-latency and high-bandwidth connections so that artificial intelligence devices can make the right decisions instantly, Wang said.
All of these devices would generate strong demand for faster and more power-efficient semiconductors made by TSMC, he said.
To satisfy customers’ demand, TSMC plans to start volume production of chips using 5-nanometer technology in the first half of next year at a Tainan fab as scheduled, Wang said.
“We will gain much more business as we ramp up deployment of 5-nanometer [technology] next year,” he said.
TSMC in October said it would be the first wafer foundry capable of providing 5-nanometer chips when the technology becomes commercially available.
It plans to start mass production of chips using 3-nanometer technology in 2022, in line with Moore’s Law that transistor count will double every two years due to shrinking transistor dimensions.
To facilitate the development of next-generation technologies beyond 3 nanometers, TSMC plans to build a new research and development center in Hsinchu County’s Baoshan Township (寶山) next quarter, Wang said.
The center would be able to house 8,000 engineers after construction is completed in 2021, TSMC said.
About 700 suppliers led by Applied Materials Inc and ASML Holding NV attended the forum, which saw TSMC present awards to 14 excellent suppliers, including Taiwan Speciality Chemicals Corp (台灣特品化學), as TSMC gradually adopts locally made equipment and materials.
Taiwan Speciality Chemicals is 30 percent owned by silicon wafer maker Sino-American Silicon Products Inc (SAS, 中美矽晶).
SAS also owns a 50 percent stake in silicon wafer manufacturer GlobalWafers Inc (環球晶圓), which also supplies TSMC.
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