Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) plans to invest about US$100 billion to expand capacity and fund research and development (R&D) of advanced technologies in the next three years to keep up with rising demand, it said yesterday.
TSMC unveiled the rare multiyear investment plan to appease customer panic over a global chip shortage.
“We are entering a period of higher growth as the multiyear megatrends of 5G and HPC [high-performance-computing] are expected to fuel strong demand for our semiconductor technologies in the next several years,” TSMC said in a statement.
Photo: Sam Yeh, AFP
In addition, the COVID-19 pandemic has accelerated digitalization, which also drives semiconductor demand, the chipmaker said in the statement.
TSMC made the comments after China-based media Voice reported about the chipmaker’s grand capital investment plan and price adjustments, citing a letter sent by TSMC chief executive officer C. C. Wei (魏哲家) to customers. TSMC declined to comment on pricing.
TSMC has been improving productivity and boosting factory utilization to more than 100 percent over the past 12 months, but has not been able to keep up with demand, Wei said in the letter obtained by the Taipei Times.
The chipmaker is taking more actions to avert future supply crunches, it said.
“TSMC will be building greenfield [new] fabs and expanding existing fabs for both leading-edge and specialty technologies,” Wei said. “We have started hiring thousands of new employees, acquired land and equipment, and started construction of new facilities at multiple sites globally.”
TSMC operates 13 wafer manufacturing factories in Taiwan and China, and is building a new fab in Arizona. Based on the company’s first-phase plan, the US plant would produce 20,000 12-inch wafers per month after it opens in 2024.
TSMC in January budgeted record-high capital expenditure of US$25 billion to US$28 billion for this year, citing technology complexity, technology advancement and high costs of extreme ultraviolet lithography tools.
“Increased capacity will improve supply certainty and help protect complex global supply chains that rely on semiconductors,” Wei said.
In the letter, Wei told customers TSMC would suspend wafer price discounts through the whole of next year, starting on Dec. 31.
“We believe that this modest action is the least disruptive option to supply chains so that TSMC can deliver on our mission of providing leading semiconductor technologies and manufacturing capacity in a sustainable manner,” Wei said.
While most chipmakers have hiked prices by 30 or 40 percent to reflect surging raw material costs and volatile foreign-exchange rates, TSMC has tried to keep prices stable.
Separately, United Microelectronics Corp (UMC, 聯電) yesterday said it would invest more to expand capacity at its factories in Tainan over the next 3 years, in addition to the NT$350 billion (US$12.27 billion) it has spent on capital expenditures over the past decade.
UMC is to spend US$1.5 billion on new facilities and equipment this year, mainly on increasing its 28-nanometer chip capacity, it told investors in January.
FIRST STEP: Business groups in Taiwan welcomed the deal, which does not include tariff reductions at this stage, as they called for the elimination of double taxation Taiwan and the US yesterday signed an initial agreement under the US-Taiwan Initiative on 21st-Century Trade. The agreement was signed yesterday morning by Representative to the US Hsiao Bi-khim (蕭美琴) and American Institute in Taiwan (AIT) Managing Director Ingrid Larson in Washington, the Office of Trade Negotiations in Taipei said. The ceremony was witnessed by Minister Without Portfolio John Deng (鄧振中) and Deputy US Trade Representative Sarah Bianchi. Taiwan and the US started talks under the initiative in August last year, after Taipei was left out of the Washington-led Indo-Pacific Economic Framework. “The deal that will be signed tonight is not only very historic,
Beijing yesterday blamed US “provocation” for an incident last week in which a Chinese plane crossed in front of a US surveillance aircraft over the South China Sea. The incident came at a time of frayed ties between Washington and Beijing over issues including Taiwan and the shooting down of an alleged Chinese spy balloon that flew over the US this year. “The United States’ long-term and frequent sending of ships and planes to conduct close surveillance on China seriously harms China’s national sovereignty and security,” Chinese Ministry of Foreign Affairs spokesperson Mao Ning (毛寧) said when asked about the latest incident. “This
‘GLOBAL NETWORK’: The only way to deter a Chinese invasion is for the international community to unite in its resolve, Deputy Minister of Foreign Affairs Roy Lee said Deputy Minister of Foreign Affairs Roy Lee (李淳) yesterday urged democratic nations around the world to not let Beijing dictate the definition of their “one China” policies, saying that they should increase cooperation with Taiwan to build a resilient democratic network. Lee made the remarks during his speech, titled “Ukraine and Taiwan: Why Global Unity Matters,” at the annual Bratislava Forum in Slovakia. “People in Taiwan have been paying close attention to the situation in Ukraine and admire Ukrainians for defending their homeland. They are [also] fighting for Taiwan and democratic countries around the world,” Lee told forum participants. “The international
HARD-WON FREEDOM: Beijing’s 1989 crackdown on protesters has not been and should not be forgotten, as China tightens its grip on Hong Kong, Lai said Taiwanese enjoy democracy and freedom and have multiple ways to express their creativity, and hopefully young people in China would also one day have the freedom to sing and express themselves, President Tsai Ing-wen (蔡英文) said yesterday, commemorating the Tiananmen Square Massacre. Yesterday was the 34th anniversary of the Chinese People’s Liberation Army’s bloody crackdown on student-led protests in Beijing in 1989, also known as the June Fourth Incident. Tsai posted a photograph taken in March in a subway station in Guizhou, China, where hundreds of young people gathered to sing People With No Ideals Don’t Get Hurt (沒有理想的人不傷心), saying that they