Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday announced plans to build a new plant in Japan next year to produce 22-nanometer and 28-nanometer chips in its latest effort to expand its global manufacturing footprint.
The Japanese fab is to start operations in 2024, the world’s biggest contract chipmaker said, ending months of speculation.
“We have received strong commitment to supporting this project from our customers and the Japanese government,” TSMC chief executive officer C.C. Wei (魏哲家) told a quarterly investors’ conference.
Photo: Ann Wang, Reuters
“We believe the expansion of our global manufacturing footprint will enable us to better serve our customers’ needs and reach global talent, while earning a proper return from our investments and deliver long-term profitable growth for our shareholders,” he said.
Wei declined to disclose more details about the capacity and financial arrangements for the fab, and the company did not directly answer whether it would be a joint venture.
The chipmaker said it would consider joint ventures with other companies or key customers on a case-by-case basis when building plants overseas.
Normally, TSMC owns 100 percent of its overseas operations, such as those in China and the US.
Last week, Nikkei reported that TSMC and Sony Group are considering building a plant in Kumamoto Prefecture to make chips used in automobiles and camera image sensors.
The total investment could reach ￥800 billion (US$7.04 billion), with half of the amount coming from the Japanese government, the report said.
Apart from Japan, Wei said that TSMC would not rule out the possibility of building fabs elsewhere, including in Europe.
Japanese Prime Minister Fumio Kishida yesterday welcomed TSMC’s decision, saying that it would contribute to the country’s chip self-sufficiency.
Even with massive capital expenditures in the pipeline, the Hsinchu-based chipmaker yesterday raised its long-term gross margin forecast to more than 50 percent, rather than just 50 percent.
Gross margin this quarter is expected to be 51 to 53 percent, compared with 51.3 percent last quarter, TSMC said.
Revenue is to reach US$15.4 billion to US$15.7 billion from US$14.88 billion last quarter, representing quarterly growth of 3.5 to 5.5 percent.
“Moving into the fourth quarter, we expect our sequential growth to be supported by our industry-leading 5-nanometer technology,” Wei said. “Based on our fourth-quarter revenue guidance, our revenue this year is expected to grow 24 percent year-on-year in US dollar terms.”
Wei also said that the company is making progress in developing next-generation technologies.
TSMC is on track to start initial production of 3-nanometer chips later this year before entering volume production of chips used in smartphones and high-performance computing applications in the second half of next year, Wei said, refuting speculation about a delay in efforts as reported by a foreign investment consultancy.
The 2-nanometer chips are to come out in 2025, he said.
TSMC yesterday gave a positive outlook for chip demand in expectation that its capacity would remain tight this year and through next year.
The chipmaker’s remarks came after reporting another record quarterly net profit of NT$156.26 billion (US$5.56 billion) during the quarter ending Sept. 30. That represented annual growth of 13.8 percent from NT$137.31 billion, or quarterly growth of 16.3 percent from NT$134.36 billion.
Earnings per share rose to NT$6.03 last quarter from NT$5.3 a year earlier and NT$5.18 a quarter earlier.
Additional reporting by Reuters
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