Taiwan Semiconductor Manufacturing Company’s (TSMC, 台積電) board of directors on Thursday approved an allocation of US$2.89 billion to increase the company’s manufacturing capacity, which is expected to be used to expand its plant in Nanjing, China.
In a short statement, the world’s leading contract chip manufacturer said that the additional spending would go toward “installing mature technology capacity.”
NANJING FAB
A source within TSMC later told the Central News Agency that the money would be used to boost capacity at its Nanjing fab, aiming for production of an additional 40,000 28-nanometer chips per month.
The new capacity would begin commercial production in the second half of next year and would reach its planned monthly output by the middle of 2023, the source said.
Expanding the Nanjing fab, which currently produces 20,000 16-nanometer chips per month, was deemed the fastest way to meet customers’ demand for 28-nanometer chips, the source said.
According to TSMC’s Web site, applications for 28-nanometer chips include central processing units, graphics processors, smartphones, consumer electronics and automobiles.
STOCK INCENTIVE
TSMC’s board of directors also approved the company’s first employee restricted stock awards, with plans to issue a maximum of 2.6 million common shares for this year in an effort to attract and retain corporate executives, and to link their compensation with shareholders’ interests, and achievements in environmental, social and corporate governance.
The proposed share issuance is subject to approval by shareholders at the annual general meeting on June 8.
TRANSPARENCY
The company also shot down rumors that it plans to move monthly production of 20,000 12-inch chips from Taiwan to its Nanjing factory, because of the risk of water shortages in Taiwan.
The company will publicly announce any decisions regarding capacity planning, it said in a separate statement, adding that Taiwan remains an important manufacturing base.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
PRESSURE EXPECTED: The appreciation of the NT dollar reflected expectations that Washington would press Taiwan to boost its currency against the US dollar, dealers said Taiwan’s export-oriented semiconductor and auto part manufacturers are expecting their margins to be affected by large foreign exchange losses as the New Taiwan dollar continued to appreciate sharply against the US dollar yesterday. Among major semiconductor manufacturers, ASE Technology Holding Co (日月光), the world’s largest integrated circuit (IC) packaging and testing services provider, said that whenever the NT dollar rises NT$1 against the greenback, its gross margin is cut by about 1.5 percent. The NT dollar traded as strong as NT$29.59 per US dollar before trimming gains to close NT$0.919, or 2.96 percent, higher at NT$30.145 yesterday in Taipei trading
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