Taiwan Semiconductor Manufacturing Company, the world's largest contract chip maker, announced Thursday that it plans to shell out $100 billion in advanced chips over the next three years to keep up with growing demand.
The investment is a huge increase from the $25 billion to the $28 billion TSMC plans to spend on making advanced chips this year.
"In order to keep up with demand", TSMC plans to use the funds to "increase the ability to support the production and research and development of advanced semiconductor technologies", the company said in a press release.
The company argues that new industry trends, such as 5G and high-performance computing, will fuel strong demand for semiconductor technology in the coming years. And it added that Covid-19 pandemic "accelerates digitization in every aspect".
TSMC's shares rose more than 2% in Taipei on Thursday.
The moves of the competition
Global chip-making giants are racing to expand chip-making capacity to meet strong demand as a global chip shortage has hampered industries ranging from automobiles, video games and PC components. Last week, Intel unveiled a plan to invest $20 billion in two new chip-manufacturing facilities in the United States. Intel's move aims to reaffirm its position as an undisputed leader in the semiconductor industry. Delays in the production of next-generation chips have allowed competitors TSMC and Samsung to shorten distances.
TSMC said it would spend $25 billion to $28 billion this year, up from $17 billion in 2020. It added that about 80% would be used for advanced processing technologies.
The company is entering "another period of higher growth", said Wendell Huang, TSMC's vice president and chief financial officer, during the January earnings presentation.
New plants to go as far as 2 nanometer production
The capital investment will go in part to several new structures:
- A factory to produce 5 nm in Arizona, scheduled for 2024
- A factory capable of producing 3 nm in Tainan, Taiwan, scheduled to be online in the second quarter of 2022
- A factory with a capacity of 2 nanometers in Hsinchu, Taiwan and probably in Baoshan
- Two new advanced assembly plants in Taiwan