Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) plans to allocate a larger portion, or about 9 percent, of its total revenue this year to research and development (R&D) on cutting-edge technologies to safeguard its technological lead amid intensifying competition, the chipmaker’s annual report said.
That could bring TSMC’s R&D budget to more than NT$110 billion (US$3.65 billion) if it reaches its goal of growing revenue by more than 15 percent annually this year — to at least NT$1.23 trillion.
This year’s spending would be a 20 percent increase over last year’s record-high R&D expenditure of NT$91.42 billion.
Photo: EPA-EFE
The bulk, or 70 percent, of this year’s R&D budget is to be spent on advanced technologies, including the 3 nanometer (nm) technology platform and applications, next-generation technologies and 3D IC for system-in-package modules, the report said.
TSMC, a pioneer in the semiconductor industry, said that it began R&D on 2nm technology last year, as it targets 5G-related applications and high-performance-computing devices.
“To maintain and strengthen TSMC’s technology leadership, the company plans to continue investing heavily in R&D,” the report said.
“The markets for TSMC’s foundry services are highly competitive. TSMC competes with other foundry service providers, as well as with a number of integrated device manufacturers,” the company said, referring to the competition it faces.
If TSMC is unable to effectively take on these new and aggressive competitors when it comes to technology, manufacturing capacity, product quality and customer satisfaction, it risks losing customers to these new contenders, the report said.
TSMC, which commands a 52 percent share of the world’s foundry market, competes primarily with Samsung Electronics Co for advanced technology orders, while its Chinese rival Semiconductor Manufacturing International Corp (SMIC, 中芯) is positioning itself to take a bite out of TSMC’s share in China.
TSMC last week said that it plans to increase production of 3nm technology in the second half of 2022, which would make it the foremost foundry offering the technology.
The chipmaker’s report also warned of possible negative effects resulting from the COVID-19 pandemic, saying that the coronavirus might interrupt the global semiconductor supply chain and disrupt some of its suppliers.
There could be downward adjustments in customer demand or production delays for TSMC products, due to forced closures, or partial operations, at factories and offices, the report said.
Due to fallout from the pandemic, the chipmaker expects the global semiconductor industry to see stagnant revenue this year, at best, it said, adding that the industry is expected to grow at a compound annual growth rate of 5 percent between last year and 2024.
The chipmaker also disclosed that company chairman Mark Liu (劉德音) and CEO C.C. Wei (魏哲家) received NT$293 million in compensation apiece last year, accounting for 0.085 percent of net profits last year, the report showed.
Last year, the company paid NT$1.545 billion in compensation to its high-ranking executives.
PATENTS: MediaTek Inc said it would not comment on ongoing legal cases, but does not expect the legal action by Huawei to affect its business operations Smartphone integrated chips designer MediaTek Inc (聯發科) on Friday said that a lawsuit filed by Chinese smartphone brand Huawei Technologies Co (華為) over alleged patent infringements would have little impact on its operations. In an announcement posted on the Taiwan Stock Exchange, MediaTek said that it would not comment on an ongoing legal case. However, the company said that Huawei’s legal action would have little impact on its operations. MediaTek’s statement came after China-based PRIP Research said on Thursday that Huawei filed a lawsuit with a Chinese district court claiming that MediaTek infringed on its patents. The infringement mentioned in the lawsuit likely involved
Taipei is today suspending work, classes and its US$2.4 trillion stock market as Typhoon Gaemi approaches Taiwan with strong winds and heavy rain. The nation is not conducting securities, currency or fixed income trading, statements from its stock and currency exchanges said. Authorities had yesterday issued a warning that the storm could affect people on land and canceled some ship crossings and domestic flights. Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) expects its local chipmaking fabs to maintain normal production, the company said in an e-mailed statement. The main chipmaker for Apple Inc and Nvidia Corp said it has activated routine typhoon alert
GROWTH: TSMC increased its projected revenue growth for this year to more than 25 percent, citing stronger-than-expected demand for AI devices and smartphones The Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) yesterday raised its forecast for Taiwan’s GDP growth this year from 3.29 percent to 3.85 percent, as exports and private investment recovered faster than it predicted three months ago. The Taipei-based think tank also expects that Taiwan would see a 8.19 percent increase in exports this year, better than the 7.55 percent it projected in April, as US technology giants spent more money on artificial intelligence (AI) infrastructure and development. “There will be more AI servers going forward, but it remains to be seen if the momentum would extend to personal computers, smartphones and
Catastrophic computer outages caused by a software update from one company have once again exposed the dangers of global technological dependence on a handful of players, experts said on Friday. A flawed update sent out by the little-known security firm CrowdStrike Holdings Inc brought airlines, TV stations and myriad other aspects of daily life to a standstill. The outages affected companies or individuals that use CrowdStrike on the Microsoft Inc’s Windows platform. When they applied the update, the incompatible software crashed computers into a frozen state known as the “blue screen of death.” “Today CrowdStrike has become a household name, but not in