Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said it plans to spend a record-high US$52 billion to US$56 billion in capital expenditure this year to expand advanced chip capacity to meet “insatiable” demand for artificial intelligence (AI) applications.
The budget represents a surge of 27 to 37 percent compared with the US$40.9 billion spent last year.
About 70 to 80 percent of this year’s budget would be earmarked for leading-edge technology expansion, while about 10 to 20 percent would be allocated for advanced chip packaging technology, TSMC said.
Photo: Tien Yu-hua, Taipei Times
The go-to chipmaker for Nvidia Corp and Apple Inc said the capital spending spree would carry through 2028 as it attempts to solve chip supply bottlenecks.
“We observe increasing AI model adoption across consumer, enterprise and sovereign AI segments. That is driving meaningful demand for more and more computation, which supports robust demand for leading-edge silicon,” TSMC chairman and chief executive officer C.C. Wei (魏哲家) told an earnings conference in Taipei.
As customers continue to provide a positive outlook — along with strong signals from businesses such as cloud service providers — TSMC is convinced that “the multiyear AI mega-trend remains strong. We believe that demand for semiconductors will continue to be fundamental,” Wei said.
“I believe the AI [boom] is real. Not only real, it has started growing into our daily life,” Wei said.
To address strong AI chip demand, TSMC said it is expanding chip manufacturing capacity in Taiwan, including 2-nanometer facilities in Hsinchu County and Kaohsiung, and advanced chip packaging capacity.
In the US, TSMC is stepping up capacity buildup in Arizona, as it plans to move in new manufacturing equipment this year for its second fab in the US state, in preparation for high-volume production of 3-nanometer chips in the second half of next year, the company said.
TSMC is building a third fab at the site and seeking construction permits for a fourth, as well as its first advanced chip packaging facility there, it said.
TSMC has also acquired a second plot of land in Arizona, where it plans to build multiple chip fabs to create a “gigafab” cluster, Wei said.
The company continues efforts to narrow the gap between customer demand and chip supply, and expects more healthy supply-demand dynamics in 2028 or 2029, he said.
TSMC also expects robust AI demand to boost its revenue growth by about 30 percent this year, with about 25 percent growth on average from 2024 to 2029.
Revenue this quarter is expected to grow about 4 percent sequentially, or 38 percent annually, to between US$34.6 billion and US$35.8 billion, the company said.
Gross margin is to climb to between 63 and 65 percent this quarter from 62.3 percent the previous quarter, as cost improvement and higher factory utilization help offset margin dilution from its overseas fabs, it said.
The company yesterday reported record-high net profit of NT$1.717 trillion (US$54.35 billion) for last year, soaring 46.4 percent from NT$1.173 trillion in 2024. Earnings per share rose to NT$66.25 from NT$45.25, and gross margin increased to 59.9 percent from 56.1 percent.
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