What just happened? The global chip shortage has led to problems across multiple industries. With demand for semiconductors expected to continue for the foreseeable future, TSMC has announced plans to invest over $100 billion across the next three years on expanding manufacturing capacity and research and development.
“TSMC is entering a period of higher growth as the multiyear megatrends of 5G and HPC are expected to fuel strong demand for our semiconductor technologies in the next several years,” the company wrote in a statement.
“In addition, the COVID-19 pandemic also accelerates digitalization in every aspect. In order to keep up with demand, TSMC expects to invest $100 billion over the next three years to increase capacity to support the manufacturing and R&D of advanced semiconductor technologies. TSMC is working closely with our customers to address their needs in a sustainable manner.”
TheEdgeMarkets writes that TSMC already planned to spend between $25 billion – $28 billion this year on developing new chips, a YoY increase of around 45% – 62% compared to the $17.2 billion it spent in 2020. Tom’s Hardware notes that it spent about $3.72 billion on R&D, roughly 8.2% of its revenue, last year.
TSMC Chief Executive Officer C.C. Wei told its customers that the company’s fabs have been “running at over 100% utilization over the past 12 months,” but it’s still not been enough to meet demand.
Strangely, we heard last month that TSMC was auctioning off excess wafer capacity—at a premium, of course. It’s also facing problems in its home country of Taiwan, where a drought has led to further water restrictions that could impact production.
With everything from graphics cards to automobiles to laptops impacted by the chip shortages, the industry is pushing hard to resolve the situation. With GlobalFoundries doubling its expansion to $1.5 billion this year, it looks like we’re on the right track. Let’s hope things are back to normal sooner rather than later.