TSMC announces $100 billion investment plan

The core shortage problem is plagued the entire technology industry, including various electronic products and automobiles are facing serious chip shortage problems, but this cannot be alleviated in a short period of time.

Chip manufacturing giant TSMC has previously announced that it will increase capital expenditures to build more fabs and optimize production lines to increase production capacity. Now TSMC has announced its latest plans.

The company plans to increase capital expenditures to US$100 billion in the next three years to build more fabs to increase overall production capacity to meet customer needs.

At the same time, these capital expenditures are also used for research and development and manufacturing of advanced semiconductor technology, that is, to expand production capacity while continuing to develop advanced manufacturing processes to maintain competitiveness.

Although TSMC is the leader in the chip foundry industry, its cash and other assets are not enough to support the plan. After all, US$100 billion is indeed too high.

In the past, TSMC would consider issuing bonds to raise funds when making large-scale capital expenditures. For investors, the bonds issued by TSMC are high-quality bonds.

Therefore, TSMC can easily complete the fundraising in the bonds issued before, but this time the funds are so huge that TSMC has not disclosed how to raise these funds.

It is worth noting that TSMC has stated that the production capacity of mature global processes is actually not fully loaded, but this does not mean that TSMC does not need to invest in expansion.

Because TSMC’s new foundries are focused on advanced manufacturing processes, the industry’s demand for advanced process chips will be beyond imagination in the next few years.

There is also news that TSMC has begun to increase the foundry prices of chips, although this is unlikely to affect companies such as Apple certainly affect other companies.

TSMC did not directly increase the price but canceled the discounts for major customers. Originally, TSMC offered more discounts to major customers and hoped to place more orders in batches.

These discounts are now gone when there is a shortage of chips, so in essence, chip prices are still increasing, and this will eventually be passed on to consumers.

Apple currently mainly allows TSMC to manufacture advanced process products. For Apple, the current core shortage problem may not be big because it will not affect Apple’s supply.

After all, as TSMC’s super customer, Apple has always had the highest priority, and Apple’s large-volume orders are actually more stable for TSMC.

Therefore, analysts believe that TSMC will continue to give Apple preferential policies and ensure production capacity for its priority production, so Apple has minimal impact on this core shortage.

Via: CNBC