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.
soft landing: The US’ rate-setting FOMC finds itself in a difficult situation as it seeks to address inflation through interest rate hikes while avoiding a recession The US Federal Reserve is widely expected to hold interest rates steady on Wednesday after a summer of mixed economic data, while leaving the door open to another hike if needed. The Fed has raised interest rates 11 times over the past 18 months, lifting its key lending rate to a level not seen for 22 years as it tackles inflation still stubbornly above its long-term target of 2 percent. Analysts and traders broadly expect the US central bank to hold rates steady on Wednesday in order to give policymakers more time to assess the health of the world’s largest economy. “We think
AI TREND: TSMC has been rapidly expanding capacity to meet a spike in demand for advanced packaging services, but still expects supplies to be tight for 18 months Arizona is in talks with Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) about advanced chip packaging, state Governor Katie Hobbs said yesterday, which is crucial for the manufacturing of artificial intelligence (AI) chips. TSMC, which is building a US$40 billion chip factory in the US state, has not announced plans to build facilities for advanced chip packaging in the US. Advanced packaging processes stitch multiple chips together into a single device, lowering the added cost of more powerful computing. “Part of our efforts at building the semiconductor ecosystem is focusing on advanced packaging, so we have several things in the works around that
At a sprawling South Korean arms factory on Friday, a high-tech production line of robots and super-skilled workers were rapidly churning out weapons that could, eventually, play a role in Ukraine. Since the Russian invasion last year, the Hanwha Aerospace factory in the southern city of Changwon has expanded production capacity three times, workers told reporters, as South Korea ramps up arms exports while traditional behemoths like the US struggle with production shortages. Longstanding domestic policy bars Seoul from selling weapons into active conflicts, but even so it signed deals worth US$17.3 billion last year, including a US$12.7 billion agreement with NATO
Tailwinds: Blockbuster earnings at Nvidia Corp have sparked hopes of a tech sector boom; Taiwanese chipmakers are hopeful benefits will come to them too The worst could be over for the New Taiwan dollar as China’s economic recovery and a rebound in the chip industry will support the beleaguered currency, analysts said. The NT dollar is on course to weaken for a sixth month, the longest stretch since 2006, after foreign funds turned sour on its technology sector and risk sentiment deteriorated on slower growth in China. The tide seems to be turning now on nascent signs of stabilization in China’s economy — its biggest trading partner — following policy boosts. The yuan emerged as the best-performing Asian currency last week, followed by the Japanese yen
RSS