With the purchase of additional land in Miaoli County’s Jhunan Township (竹南) for the company’s new plant project, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is set to expand its lead over its rivals in advanced process technology.
TSMC announced on Tuesday it had acquired two plots of land in the Jhunan Science Park (竹南科學園區) from the Miaoli County Government through an auction for NT$3.21 billion (US$109.4 million).
In a filing to the Taiwan Stock Exchange, the Hsinchu-based company said it planned to build new plants on the 43,322.6 ping (143,215.18m2) of land.
“The company will build 18-inch wafer fabs that use 7-nanometer (nm) process technology on the newly acquired land,” a TSMC public relations official said by telephone on behalf of spokeswoman Elizabeth Sun (孫又文).
The official, who preferred not to be named, said the company planned to start construction of the plants in 2016 and move new equipment to the plants in 2017.
With this announcement, TSMC has again extended its technological lead, with 20nm being the most advanced process technology currently available.
On Oct. 9, TSMC said it was ready with its “CoWoS” design infrastructure for customers to design three-dimensional chips using 20-nanometer technology and planned to crank out 20nm chips next year.
The share price of TSMC fell 0.35 percent to close at NT$85.4 yesterday in Taipei trading. The stock has risen 12.66 percent so far this year, versus an overall 3.43 percent rise of the TAIEX.
“We think it is too early to reflect anything regarding the 18-inch plan in TSMC’s share price,” Carlos Peng (彭國維), an analyst at Fubon Securities Investment Services Co (富邦投顧), said yesterday.
“For the longer term, we remain positive towards TSMC’s growth potential because we note TSMC’s strong revenue growth through its heavy capex in the past three years,” he added.
TSMC did not elaborate on the investment on its 18-inch wafer fabs in Jhunan. The company has raised its capital expenditure to a record US$8.5 billion for this year in an effort to satisfy customers’ strong demand for its advanced 28nm chips for their mobile devices, while local media have speculated the company may increase its capex to US$10 billion next year to make chips for customers, including Apple Inc.
“We think TSMC’s capex in the 28nm/20nm tech nodes will sustain its dominant position at least in the next one to two years,” Peng said.
Earlier this month, TSMC said its third-quarter revenue increased 10.4 percent sequentially to a record level of NT$141.38 billion. The company is to reveal its third-quarter earnings and fourth-quarter prospects at an investors conference set to be held today.
Additional reporting by Lisa Wang