Taiwan Semiconductor Manufacturing Co. (TSMC) will pour as much as $28 billion into capital spending this year, a staggering sum aimed at expanding its technological lead over the likes of moribund Intel and constructing a plant in Arizona to serve Apple and other key American customers.
Capital spending for 2021 is targeted at $25 billion to $28 billion, compared with $17.2 billion the previous year. About 80% of the outlay will be devoted to advanced processor technologies, suggesting TSMC anticipates a surge in business for cutting-edge chipmaking. Intel Corp., which on Wednesday announced a new CEO, is said to be contemplating a departure from tradition and outsourcing manufacture to the likes of TSMC.
The world’s largest contract chipmaker expects revenue of $12.7 billion to $13 billion this quarter, ahead of the $12.4 billion average of analyst estimates. That will power mid-teens sales growth this year…
The sheer scale of TSMC’s envisioned budget — more than half its projected revenue for the year — underscores TSMC’s determination to maintain its dominance and supply its biggest American clients from Apple Inc. to Qualcomm Inc. At 52% of projected 2021 revenue, the chipmaker’s planned spending would be the sixth-highest among all companies with a value of more than $10 billion, according to data compiled by Bloomberg. The outlay may also ramp up pressure on Intel, whose budget for 2020 was roughly $14.5 billion.
In their report, TSMC executives reiterated that construction on a planned $12 billion plant in Arizona will begin this year, without specifying how much of the planned capital spending for this year will be allocated to the massive project. TSMC’s Arizona chip fab will be completed by 2024, with initial target output of 20,000 wafers per month, though the company envisions having a “mega scale production site” over the long term, Chairman Mark Liu said.
In November, city officials in Phoenix, Arizona unanimously voted to authorize a development agreement with TSMC that would provide $205 million in city funds for infrastructure such as roads and water improvements for a $12 billion U.S. semiconductor fab backed by the Trump administration.
MacDailyNews Take: Feckless Intel deserves the emasculation it’s receiving. This is only the beginning.
When flawed, insecure, and therefore defective products are sold to consumers, recalls and/or recompense are the proper responses. — MacDailyNews, January 4, 2018
CERT: The only way to fix the Meltdown and Spectre vulnerabilities is to replace the CPU. Intel et al. are going to try to sell us on a software bandaid instead of really fixing the problem properly. Watch and see. https://t.co/OeC2AoPdlK #Intel #AMD #ARM
— MacDailyNews (@MacDailyNews) January 4, 2018