Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday held a groundbreaking ceremony for a NT$500 billion (US$17.18 billion) fab in Tainan, which it said would produce the world’s first 5-nanometer chips in 2020.
The Tainan fab is to be TSMC’s biggest manufacturing site, and the capital investment is expected to help extend the contract chipmaker’s technological lead, including in the 7-nanometer and 10-nanometer process technologies, over rivals such as Samsung Electronics Co.
TSMC, a major microprocessor supplier for Apple Inc’s iPhones, commands a 56 percent share of the world’s foundry market.
Photo: Huang Wen-yu, Taipei Times
The company said the investment shows its continuous pursuit of technological advancement by moving to the next technology node every two years based on Moore’s law.
“About seven or eight years ago, many global semiconductor companies stopped pushing forward their technologies. As of today, only three companies in the world continue to move forward with advanced technologies: TSMC is one of them,” TSMC chairman Morris Chang (張忠謀) said at the ceremony.
“This facility, called Fab 18, is to start volume production of 5-nanometer [chips] in two years. I have high expectations that this will be the world’s first 5-nanometer [chip plant],” Chang said. “Next comes 3-nanometer [technology]. We are confident that we will be able to produce 3-nanometer [chips] in three to four years.”
TSMC said it plans to utilize half of Fab 18’s space to build 3-nanometer production lines.
The new facility in the Southern Taiwan Science Park (南部科學工業園) will help fuel the company’s growth, Chang said.
As the company delivers a 15 percent to 20 percent ratio of return on invested capital, it could recover the NT$500 billion investment within five years, during which it might generate NT$1.5 trillion in revenue, he said.
TSMC aims to grow revenue at an annual pace of between 5 percent and 10 percent to 2021 in US dollar terms, he added.
Combined with NT$200 billion in research and development spending, TSMC said it would invest a total of NT$700 billion on the 5-nanometer process.
In the first phase of Fab 18’s development, volume production is scheduled to start in 2020 on 5-nanometer technology, two years after the firm ramps up 7-nanometer production next quarter, it said.
The second phase of development is to begin construction in the third quarter, with volume production starting in 2020, TSMC said, adding that the third phase is scheduled to start construction in the third quarter of next year, with the aim of launching volume production in 2021.
Once the three phases of construction are complete, the fab’s estimated annual capacity would exceed 1 million 12-inch wafers, creating 4,000 jobs, it said.
The science park is the biggest manufacturing site for TSMC, accounting for 40 percent of the company’s total revenue. Fab 14, which produces advanced 10-nanometer and 16-nanometer chips, is also based in the park.
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