It looks like everyone is tackling the chip shortage. According to PhoneArena (via Wall Street Journal), TSMC will invest $100 billion over the next three years. The goal of this investment is to increase the capacity of its production facilities.
The Wall Street Journal is saying that it is not only a company record but an industry record as well. TSMC is the largest chip supplier in the world, and they supply designed chips to companies like Apple, MediaTek, Intel, AMD, and others.
As the chip shortage continues and demand for the 5G chips continues, TSMC is struggling to produce enough to provide its customers. CEO C.C. Wei sent a letter to the company’s clients that was read the journal.
Wei writes that “even with utilizing its fabs at a rate over 100%, TSMC has been unable to keep up with its clients’ demands.” In addition, in the letter, Wei mentions that the company is hiring thousands of new employees. The company also has plans on expanding its production facilities by building new fabs.
According to New Street Research analyst Pierre Ferragu, the $100 billion TSMC will invest is double what the company spent the prior three years. TSMC says that it “is working closely with our customers to address their needs in a sustainable manner.”
TSMC is focusing on producing and shipping 3nm chips after producing 5nm chips like the A14 Bionic for Apple last year. In order to build these new 3nm chips, TSMC must build new lines to do so. That is an expensive investment.
TSMC will invest $100 billion to increase its productivity
The company even finished its plant structure for 3nm fab at its Southern Taiwan Science Park last year. TSMC is not the only company investing money to expand. Intel is looking to spend $20 billion to build two new chip factories in the U.S. The new factories will start being built-in 2024.
But the company can’t start soon enough. Intel used to boast that it had a three-year head start over its competition. However, that lead has been cut into by TSMC and Samsung to where Intel is now behind them.
Samsung is already planning on investing $116 million dollars by 2030 to expand its production of chips. TSMC is also going to build a chip factory here in the United States. The company will spend $12 billion dollars to build a factory in Arizona.
By 2024 is when the Arizona factory should be operational and will be able to produce 20,000 12-inch wafers per month. 5nm chips will be the focus of the Arizona factory which can be awkward. By 2024 3m will be the new cutting edge technology, so if that is true the Arizona factory will be producing out-of-date tech. Of course, TSMC may change the focus of the Arizona plant to fit what is needed.
Ironically Intel will also be building two U.S. factories in Arizona as well. President Joe Biden’s $2.3 trillion dollar infrastructure plan will set aside $50 billion for the semiconductor industry. Doing so should continue the U.S. to reduce its reliance on Asian chip manufacturers.
The global chip shortage is causing problems across many industries. Recently the news of the White House hosting a meeting featuring chipmakers and auto manufacturers came out. The point of that meeting is to also help solve the global chip shortage.