https://safirsoft.com TSMC invests in new capacity despite expectations of lower demand for chips
TSMC's investment puts Samsung and Intel's casting plans "above," and analysts warn of waning demand. Technology tools.

TSMC said Thursday it expects capital spending to reach $44 billion this year, up 32 percent from $30 billion in 2021 and triple what it was in 2019.

This indicates to excessive pressure. The role of semiconductors in merchandise goes beyond traditional electronics, from automobiles to factory equipment. It also demonstrates TSMC's dominance of global chip production.

TSMC's cost scale also raises the bar for ambitious plans by Samsung, TSMC's closest competitor in traditional chip makers, and Intel, which has entered the market. "Intel and Samsung will work hard to keep pace with the scale that TSMC has planned," said Dylan Patel of Semianalysis. Thursday's research note.

TSMC has built a massive manufacturing plant in southern Taiwan for advanced 3nm chips, the technology level is scheduled to start production later this year. It is also building a new plant with 5nm technology, which is the latest state-of-the-art technology in the United States.

The company said development is necessary because demand for its chips continues to grow. Double-digit margins for years to come, even if some analysts predict slower growth after a growth jump over the past two years.

“Silicon content is on the rise,” TSMC CEO said. So even if there is a dip, we think it will fluctuate less for TSMC. So we expect our capacity to remain very limited through 2022.”

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The company expects its revenue to grow at least 25% this year. It will grow at least 5% than the traditional chip industry and will grow three times faster times of the semiconductor market.

Several analysts have warned that technology demand growth will reach a level that “has stalled, especially in the smartphone sector, which accounts for a large proportion,” said Christine Love, Associate at Third Bridge, a consultant. Technical, "even if we look. Over the past decade."

He added that recent forecasts of lower demand this year from Chinese smartphone brands also apply to MediaTek, the Taiwanese chip design house where most smartphone makers will supply Chinese smartphones, and TSMC will be affected. In the fourth quarter of 2021, it recorded a 21.2 percent increase in revenue over the previous year. areas of human life and increasing computing intensity.

These trends have been reflected in the launch of 5G communications services, the use of artificial intelligence in everything from entertainment to factory automation and self-driving. The company said the increase in demand for TSMC chips needed to build more capacity faster.

The pandemic has accelerated demand by creating an unexpected demand for technology tools needed to work from home. This jump in demand, along with global disruptions in production and logistics, as well as a lack of planning due to the pandemic, have led to persistent chip shortages that have given TSMC more leverage in the market.

The company raised prices and required data from many of its customers to make progress in building capacity, a method rarely used until last year. Wendell Huang, chief financial officer, said the company received $6.7 billion in such advances in 2021 and expected that amount to increase this year.

Due to strong demand and full usability, TSMC's gross profit margin was 52.7. The percentage in the December quarter was expected to reach more than 53% this year, a level management says can be maintained in the long term.

© 2022 The Financial Times Ltd. All rights reserved, no redistribution. Copied or modified in any way.



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