Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday raised its projected capital spending for this year by 62 percent, a new high, in an attempt to satisfy customer demand for advanced technologies in the production of central processing units, high-performance-computing (HPC) devices and 5G applications.
After investing US$17.24 billion last year, TSMC this year plans to spend US$25 billion to US$28 billion on manufacturing equipment and new facilities, including a fab in the US.
About 80 percent of the budget would be allocated for developing advanced technologies including 3, 5 and 7-nanometer technologies, the company said.
Photo: Hung Yu-fang, Taipei Times
The larger-than-expected capital spending prompted speculation that TSMC might use it to cope with new CPU orders from Intel Corp, rather than demand for smartphone application processors from Apple Inc.
“We don’t comment on specific customers or areas. Our capital expenditure is based on long-term demand and the industry mega-trends of 5G and HPC,” TSMC chief executive officer C.C. Wei (魏哲家) told a virtual investors’ conference yesterday.
CPU, networking and artificial intelligence accelerators would be the main growth drivers in the HPC segment, Wei said.
Intel is expected to outsource production of its new CPU, dubbed Core i3, to TSMC in the second half of this year, using TSMC’s 5-nanometer technology, according to TrendForce Corp (集邦科技).
The US chip giant is also planning to farm out production of mid and high-end CPU to TSMC, starting in the second half of next year, using 3-nanometer technology, the Taipei-based researcher said.
TSMC chairman Mark Liu (劉德音) said that strong demand for 3- and 5-nanometer chips in HPC applications gave the chipmaker confidence to boost capital spending at such a significant rate.
“I think our business was in the past few years driven by smartphones. From this year, HPC is jumping on the bandwagon,” Liu said. “Our 5-nanometer demand is even stronger than we expected three months ago.”
TSMC expects intensive capital spending to accelerate its revenue growth by a compound annual growth rate of 10 to 15 percent from this year to 2025, faster than the chipmaker’s previous estimate of 5 to 10 percent.
This year, revenue would grow about 15 percent annually, outpacing the foundry sector’s growth of 10 percent, Wei said.
The global semiconductor industry’s revenue is forecast to grow 8 percent this year, he said.
Concerning TSMC’s overseas expansion plan, Liu said that construction of the US fab would start this year and take until 2024.
The fab would have an installed capacity of 20,000 wafers per month, Liu said.
The chipmaker is also evaluating the feasibility of setting up a material development center in Japan for 3D ICs, he said.
TSMC yesterday forecast gross margin for this quarter of 50.5 to 52.5 percent, down from 54 percent last quarter, due to slightly lower factory utilization and unfavorable foreign exchange rates.
This quarter, revenue would grow 1.57 to 2.52 percent to US$12.7 billion to US$13 billion, from US$12.68 billion last quarter, the company said.
“Moving into the first quarter of 2021, our business continues to be strong, supported by HPC-related demand, recovery in the automotive segment and a more moderate smartphone seasonality than in recent years,” Wei said.
Demand from the automotive segment is rebounding from a slump last year due to the COVID-19 pandemic, leading to supply constraints of image sensors, power management chips and chips for advanced driver assistance systems, Wei said.
TSMC yesterday reported 23 percent annual net profit growth to NT$142.77 billion (US$5.02 billion) from NT$116.04 billion, setting an all-time high, and a quarterly growth of 4 percent from NT$137.31 billion.
Last year as a whole, net profit soared 50 percent to NT$517.89 billion from NT$345.26 billion in 2019. That translated into earnings per share of NT$19.97, up from NT$13.32 in 2019.
Annual revenue expanded 25.2 percent to NT$1.34 trillion from NT$1.07 trillion, with smartphone applications contributing about half of TSMC’s profit.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the