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The Taiwan Semiconductor Manufacturing Company (TSMC) expects that its latest semiconductor manufacturing technologies will be the best in the world once they are launched. TSMC is the world’s largest contract chip manufacturer, as it is responsible for fulfilling the chip needs of several technology firms, such as Apple, Inc and Advancd Micro Devices, Inc (AMD). TSMC reported its earnings for the fourth quarter of and the full fiscal year 2022 earlier today in Taiwan, and at the event, the company’s executives shared details for its future technologies and capital expenditures, both of which are hot topics in the semiconductor industry in the wake of the ongoing pandemic that has resulted in record demand for consumer electronics and other semiconductor-based devices.
TSMC Expects Chip Supply To Remain Tight During 2022 As Devices End Up Increasing Silicon Use
At the investor call, TSMC’s chief executive officer Dr. C.C. Wei and its chief financial officer Mr. Wendell Huang shared details for its capital expenditure, current outlook, demand for new technologies and future plans, among other areas. Mr. Huang started off by stating that for the current year, TSMC plans to spend between $40 billion and $44 billion in capital expenditure, confirming reports that had surfaced late last month. The CFO also explained that the bulk of this investment, ranging between 70% and 80% will be focused on what TSMC describes as advanced technology products. These cover the fab’s 7-nanometer (nm), 5nm, 3nm and 2nm chip manufacturing processes.
Dr. Wei remained confident about his company’s ability to compete in the leading-edge semiconductor manufacturing technology industry, and his comments imply that TSMC will have outpaced U.S. chip giant Intel Corporation in the sector once it launches the N3 technology family later this year.
These were made in his opening remarks, which were as follows:
The TSMC chief also shared his take on the current situation of the semiconductor market and how things will fare out for supply this year. His industry has been hit with historic demand throughout 2021, and there is a division of opinion in the financial world on whether chip shortages and supply constraints due to high demand will continue this year. However, he was careful to reserve comments on whether short term supply chain constraints would continue. These constraints have not only stretched his company’s production capacity but also resulted in record revenue growth despite increasing economies of scale.
Our 3-nanometer technology will be the most advanced foundry technology in both PPE and transistor technologies when it is introduced. With our technology leadership and strong customer demand, we are confident that our N3 family will be another large and long lasting node for TSMC.
Dr. Wei summarized his and TSMC’s outlook by stating that:
Later on, the TSMC chief reiterated that a higher silicon content in newer devices is a major driver for the high demand his company is facing. He also clarified in response to a question that the higher tapeouts for the N3 process technology family are primarily for the N3 node only, and not for both the N3 and N3E processes. The latter is an optimized platform expected to be introduced next year, as TSMC expects to focus on first-generation N3 volume production in the second half of this year.
Entering 2022 we expect the supply chain to maintain a higher level of inventory as compared to the historic seasonal level, given the industry’s continued need to ensure supply security. While the short term imbalance may or may not persist, we continue to observe a structural increase in long term semiconductor demand underpinned by the industry mega trend of 5G and HPC related applications. We also observed a higher silicon content in many end to end devices, including automotive, PCs, servers, networking, and smartphones. As a result, we expect our capacity to remain tight throughout 2022, as we believe our technology leadership will enable TSMC to capture strong demand for our advanced and specialty technologies.
The company’s senior vice president of research and development, Dr. Yuh Jier Mii had outlined last year that tapeouts for the N3 process had doubled over the preceding N5 family. Tapeouts are one of the final stages in a chip design, and they involve companies submitting manufacturers their final designs prior to production.
In the aftermath of a recent fire at the production facilities of the Duch chip manufacturing equipment manufacturer ASML, Dr. Wei commented that N3 and other technology node production for this year remains unaffected. He went on to add that TSMC is ramping up production to meet customer demand for next year.
