TSMC’s record-high performance is inconvenient… Facility investment 30 trillion won carpet bombing

TSMC, the world’s No. 1 foundry (semiconductor consignment production) company, which recorded the largest sales in history even when it ended a deal with Huawei, a major customer in the fourth quarter of last year, announced that it will invest 30 trillion won in facility construction this year.

According to a report by the Wall Street Journal (WSJ) on the 14th (local time), TSMC in a conference call held immediately after the announcement of the results, “This year’s capital expenditure is at least $25 billion 783 billion won),” he said.

Bret Simpson, founder of Athens Research, a UK technology market research firm, said, “It’s a monstrous number.” .

The record-high performance last year seems to have had an impact. In 2020, TSMC recorded an annual sales of 1.339.3 trillion Taiwan dollars (about 52,554 trillion won) and a net profit of 5.17.89 billion Taiwan dollars (about 2029 trillion won). It increased by 25.2% and 70% respectively from 2019.

If TSMC’s actual investment is executed as planned, this will nearly double from $17.2 billion (about 18.900 billion won) last year. Therefore, it is observed that TSMC may have won a contract to produce Intel’s next-generation central processing unit (CPU).

Intel is currently producing CPUs using a 10 nanometer (nm) process. Until last year, R&D for the application of the 7-nano process has been conducted, but in the end, it has not exceeded the limit of technology.

Some foreign media reported that Intel is also negotiating with Samsung Electronics, but analyzed that it will only be in second place after being pushed by TSMC, which commercialized the 5-nano process first. Moreover, it is reported that Intel ordered the production of a graphics processing unit (GPU) from TSMC last year.

TSMC specifically plans to focus 80% of its investment on improving the 3-nano process. It plans to test-produce 3-nano products this year and mass-produce in the second half of next year. It can be interpreted that when an order from Intel is received, it is to increase production capacity to avoid the situation of having to drop orders from other customers. Previously, Taiwanese market research firm Trend Force predicted that Intel will mass-produce CPUs in TSMC’s 5-nano process in the second half of this year and mass-produce processors in the 3-nano process in the second half of next year.

TSMC has customers such as Apple, AMD, Qualcomm, and MediaTek. As the order volume is overflowing, even when the production line is fully operated, it is not able to meet the quantity desired by the customer.

TSMC is also increasing its overseas production bases to keep pace with this growing demand. Following the announcement last year that it will establish a semiconductor plant capable of producing 5-nano processes in Arizona, the US, there is also news that a semiconductor packaging plant will be built in Japan.

Reporter Kang Kyung-joo [email protected]

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