Taiwan Semiconductor Manufacturing Co Ltd (TSMC) has posted typically robust results, and revealed how it hopes to cope with the twin challenges of COVID-19 and simmering geopolitical tensions.
The company on Thursday announced Q2 2021 revenue of NT$372.15 billion (US$13.3B) and net income of NT$134.36 billion (US$4.8B). Revenue rose 28 per cent year-over-year in US dollars. Gross profit margin for Q3 was forecast at between 49.5 per cent and 51.5 per cent, on expected revenue between $14.6 billion and $14.9 billion.
The company also revealed that the first batch of staff from the USA have visited Taiwan to train on the five-nanometre tech TSMC will build in its forthcoming Arizona facilities. Production won't commence until early 2024.
But execs warned that, when they are working, the new fabs won't be as cheap to operate as facilities in Taiwan – so customers can expect higher prices. Depending on demand, execs said they will weigh further expansion beyond Taiwan, and in Arizona.
Due diligence on a new wafer fab in Japan is already being mulled by TSMC – a project that's outside the scope of previously announced investments. Expansion in China is also planned, with facilities in the city of Nanjing ramping up production of 28-nanometre products that TSMC execs said will be the sweet spot for memory technologies.
Intel to buy GlobalFoundries? While TSMC ponders expanding its manufacturing capacity with new builds, The Wall Street Journal today reported that Intel is exploring the purchase of GlobalFoundries for around $30 billion.
Buying GlobalFoundries would fit with Intel CEO Pat Gelsinger's strategy to become a major player in the chipmaker-for-hire business. It would be less help for Intel's product development efforts, as GlobalFoundries' current plants don't work with cutting-edge chippery or produce the CPUs and other high-margin products from which Intel makes most of its cash.
GlobalFoundries has, however, signalled that it's working on five-nanometre and three-nanometre tech, which lend themselves to the kind of kit Intel makes. However GlobalFoundries shifted to those sizes only after failing to develop ten- and seven-nanometre processes.
GlobalFoundries is not alone in having trouble at that scale. Intel's own ten-nanometre efforts were delayed by years, and its seven-nanometre product has slipped from late 2021 to sometime in 2022.
CEO C.C. Wei added that TSMC expects 28nm tech will become standard for carmakers in two to three years, and the company is working to wean automotive manufacturers off the 55nm and 40nm products they currently favour.
Execs also foreshadowed production of three-nanometre silicon in 2022 and suggested its debut will propel high-performance computing to become TSMC's single largest segment.
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On the company's earnings call, company chair Mark Liu fielded a question about what TSMC customers think of the potential for war between China and Taiwan.
He responded: "Everybody wants to have a peaceful Taiwan Strait… it is to every country's benefit. But also because of the semiconductor supply chain in Taiwan, no one wants to disrupt it.
"I don't think that any disability in Taiwan Strait is any country's wish to make it happen. So I'm optimistic on that."