TAIPEI – Taiwan Semiconductor Manufacturing Co., said Thursday it will raise its capital cost to higher levels as the world’s largest contract chipmaker looks to maintain its lead in semi-production technology branch.
The company, which is fresh from financial performance above 2020, is budgeting between $ 25 billion to $ 28 billion for capital expenditures this year, up from $ 17.2 billion in 2020, TSMC CFO Wendell Huang said Thursday. Approximately 80% of that amount will be allocated to the company’s three most advanced chip production technologies, including one still in development, and 10% will go toward expansion of the technology. chip stacking and 3D packaging.
A separate TSMC confirmed to Nikkei on Thursday that they are looking to set up a research and development center in Japan to develop 3D chip stacking technologies together with local chip product suppliers. However, the company has denied previous media reports that it intends to set up a joint venture or build a production facility in Japan.
CC Wei, TSMC chief executive, said Taiwanese titanium chip, which is the only supplier of Apple iPhone and Mac processors, expects the smartphone market to return to growth in 2021, expanding 10% of the compared to last year. The lead rate for 5G smartphones is expected to jump to more than 35% of the total market this year, up from 18% last year, he said.
Mass adoption of 5G smartphones, coupled with strong demand for high-performance computing, will help TSMC’s revenue grow 15% in dollar terms this year, Wei said.
Over the long term, TSMC now forecasts that its revenue will grow at a complex annual rate of 10% to 15% for the five years through 2025, higher than the estimate previously of 5% to 10%.
However, Wei also recognized a severe shortage of car – related chips, which has already forced carmakers such as Nissan, Toyota, Honda and Ford to scale back. TSMC automatically makes connected chips for messengers including NXP, STMicroelectronics, Infineon and Renesas Electronics.
“The soft car market was from 2018 through 2020, and COVID-19 was further affected,” Wei said. Demand for automation-related snacks went back in the fourth quarter of last year, he said, but this came as TSMC was already facing an increase in orders from customers. other deals. “We work closely with our customers to mitigate the effects” of supply constraints.
Most of its capital spending this year will go toward 3-nanometer chip production technology, which the company hopes to deploy in the latter half of 2022, in addition to the 5-nm production technology and Earlier 7-nm, which is used to build the latest iPhone processors and notebook processors for advanced Micro Devices. Wei said the early adopters of TSMC 3-nanometer chips will be mostly high-performance computing, including computer processors and AI accelerators, and smartphone messengers.
Nanometer size refers to the line width between transistors on a chip, the smaller the number, the more advanced and powerful the chips – and the more challenging they are to extract.
Currently, only Samsung is able to make chips as advanced as those of TSMC. US Intel is still struggling to move forward with its advanced chip production technologies, with the outgoing CEO saying the company needs a “contingency plan” to overcome delays in the process. their technological roadmap.
TSMC’s profit for the last quarter of 2020 reached $ 142.76 billion Taiwan new dollars ($ 5.1 billion), up 23% year-on-year, on revenue exceeding NT $ 361.53 billion.
TSMC’s projected revenue for the first three months of this year could reach between $ 12.7 billion and $ 13 billion, growing about 25% at the midpoint of a year ago. This is above the market consensus on the dollar, but it falls slightly short in New Taiwan dollar terms due to an unfavorable exchange rate.
For 2020 as a whole, TSMC generated revenues in excess of NT $ 1.33 trillion, up more than 25% from the previous year. For the U.S. dollar, revenue for the year jumped 31.4% to $ 45.51 billion. Taiwanese currency rose 5.6% against the green last year.
TSMC’s share price climbed more than 56% in 2020 and has risen more than 12% so far this year. The Taiwanese chipmaker is the most valuable chip company in the world.
Randy Abrams, an analyst with Credit Suisse, said the outlook is near a positive term, announcing strong demand for 5G smartphones and various Apple products, as well as a rebound in the car and business markets. “Demand for stay-at-home is expected to continue through the first half of 2021,” said Abrams, citing growing demand for devices such as PCs and game consoles amid coronavirus infection .
“We expect TSMC not to see the first half of the year slow in 2021. The first quarter and second quarter will usually be slower, but this year the quarterback will not be as visible as it could be. fairer, “said Mark Li, an analyst with Sanford C. Bernstein.