• ‘Second phase’ build at $12bn Arizona site also on the cards
• Apple supplier’s Q2 revenue climbed 28% to a record $13.29 billion
Chips giant Taiwan Semiconductor Manufacturing Co (TSMC) has unveiled plans to build new factories in the United States and Japan.
Riding on a pandemic-led surge in demand for the chips that power smartphones, laptops and cars, TSMC announced on Thursday it will also expand production capacity in China and does not rule out the possibility of a “second phase” expansion at its $12 billion factory in the US state of Arizona.
The world’s largest contract chipmaker, which posted record quarterly sales and forecast higher revenue for the current quarter, also said it is currently reviewing a plan to set up a speciality technology wafer fabrication plant, or fab, in Japan.
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The Apple supplier’s overseas expansion plans come amid concern over the concentration of chipmaking capability in Taiwan, which produces the majority of the world’s most advanced chips and is geographically close to China, which still won’t rule out the use of force to bring the democratic island under its control.
Taiwan and TSMC have also become central in efforts to resolve a pandemic-induced global chip shortage that has forced automakers to cut production and hurt manufacturers of smartphones, laptops and even appliances.
“We are expanding our global manufacturing footprint to sustain and enhance our competitive advantages and to better serve our customers in the new geopolitical environment,” TSMC chairman Mark Liu told an analyst call.
“While our overseas fabs are not initially able to match the costs of our manufacturing operations in Taiwan, we will work with governments to minimise the cost gap,” Liu said.
COST INCREASES
He did not give details of its plans in America and Japan, adding the company was working to “firm up” wafer prices to reflect cost increases.
Reuters reported in May TSMC was eyeing expansion in Arizona beyond the one currently planned.
Revenue for April-June at TSMC, Asia’s most valuable manufacturing company, climbed 28% to a record $13.29 billion.
For the quarter ending in September, TSMC forecast revenue of $14.6 billion to $14.9 billion, compared with $12.1 billion in the same period a year earlier.
CAPACITY TIGHTNESS
TSMC said the auto chip shortage will gradually reduce for its customers from this quarter but expects overall semiconductor capacity tightness to extend possibly into next year.
The Taiwanese firm, which also makes chips for Qualcomm Inc, had previously flagged a $100 billion expansion plan over the next three years, as fifth-generation telecommunications (5G) technology and artificial intelligence applications drive global demand for advanced chips.
“Moving into the third quarter, we expect our business to be supported by strong demand for our industry-leading 5 nanometre and 7 nanometre technologies, driven by all four growth platforms, which are smartphone, HPC, IoT and automotive-related applications,” Chief Financial Officer Wendell Huang said.
PROFITS RISE
For the second quarter, TSMC said profit rose 11% to T$134.4 billion ($4.81 billion) from a year earlier, just short of an average estimate of T$136.5 billion, drawn from 19 analysts by Refinitiv.
Shares of TSMC, the 11th most valuable listed company in the world, have gained about 16% so far this year, giving it a market value of $567 billion, more than double that of chipmaker Intel Corp.
TSMC’s stock closed up 0.16% on Thursday, compared with a 1.1% gain for the benchmark index.
- Reporting by Reuters
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