Earlier this month it was reported that TSMC is on schedule to begin mass production of silicon-based 3nm chips by 2022. According to the latest report on the matter, TSMC plans to invest $100 billion over the next three years to expand production capacity to meet the increasing demand for Apple’s chips.
The Taiwan-based manufacturing company already planned to spend approximately $25 billion to $28 billion this year to develop and produce advanced chips for its clients like Qualcomm and Apple.
Apple top chip supplier, TSMC, plans to invest $100 billion over three years to expand production capacity
The reason for the move to maximum production capacity is the ongoing shortage of chips in the semiconductor industry. Due to the shortage, the chip supplier has taken initiatives to increase its already planned investment. According to the statement issued by the company, the new investment will expand help in achieving its goals in a much more efficient way.
It’s unclear how TSMC — with $28 billion of cash and equivalents on its balance sheet at the end of December — intends to finance that record outlay, which underscores the enormous capital required to stay at the forefront of the industry. Relied on by everyone from Apple Inc. and Qualcomm Inc. to Nvidia Corp. and Advanced Micro Devices Inc., TSMC is the world’s go-to semiconductor foundry, or producer of chips designed by others. The silicon it churns out goes into practically every modern piece of electronics, from smartphones and smart fridges to connected cars.
In a customer letter obtained by Bloomberg, TSMC CEO C.C Wei mentioned that the company’s manufacturing plants have been working at over 100% utilization over the last year, but the high demand still outpaced the supply. Hundreds of employees are being hired and various new factories are under construction, and the chip supplier will suspend wafer price reductions for a year from the start of 2022.
The chip shortage has taken its toll on the automobile industry, calculating loss revenue of approximately $60 billion this year. Companies like Ford Motor Co. stated that it would temporarily suspend production at two plants that make its best selling F-150 pickup. Over the next year, TSMC is expecting some competition from U.S. rival Intel Corp which is investing almost $20 billion in two new factories in Arizona.