TSMC's post-pandemic future in a world short of chips? New factories, more revenue

It's not all bad news for some


Taiwan Semiconductor Manufacturing Co. has a clear vision of its post-pandemic reality: more demand for chips, and even more profits from it.

The contract chip manufacturer's boss CC Wei on Thursday said the company is expanding capacity to meet the growing demand for chips in equipment related to 5G, high-performance computing and automotive products.

"COVID-19 has ... fundamentally accelerated the digital transformation making semiconductors more pervasive and essential in people's lives," Wei said, during an earnings call. "TSMC is better positioned to capture the course from its favorable industry megatrend."

For one, TSMC said it will construct a new factory in Japan to fabricate chips using the older 22- and 28-nanometer nodes. The factory will go live in 2024, but TSMC didn't mention the type of chips the facility will produce.

"We don't rule out the possibility of building a fab in other areas that include Europe. However, we do emphasize when we build up a new capacity for 28-nanometer is almost all to serve the specialty technologies," Wei said. These cover a "broad range of applications, including mobile devices, automobile electronic systems, medical systems, wearables, and the Internet of Things, that enrich our lives," he said.

Contract chip manufacturers including GlobalFoundries are investing in new factories on older manufacturing nodes to make chips for cars and other equipment, said Jim McGregor, principal analyst at Tirias Research.

TSMC is reportedly considering building a fab in Germany, and is building a fab in the state of Arizona in the US.

TSMC's reported third quarter revenue was $14.9bn, a 22.6 per cent increase compared to same quarter last year when calculated in US dollars. The company is expecting fourth-quarter revenue between $15.4bn to $15.7bn. That would be an increase from $12.68bn in revenue in last year's fourth quarter.

The Taiwanese titan counts chip heavyweights that include Apple, Intel and Qualcomm as its customers. A chip shortage has put pressure on TSMC to ramp up production, and Wei isn't worried about a "correction" if the supply of chips is higher than demand.

Wei said that chip supply will remain soft through 2022, and in responding to an analyst question on a possible market correction, he said "you've asked me to predict, I cannot give you a very accurate prediction."

The company previously said it would invest $100bn over the three years to increase capacity to support the manufacturing and R&D of leading edge and specialty technologies. The company raised its chip prices by up to 20 per cent, which will fund expansion plans.

The price hikes of chips could trickle down to devices, but that's only a part of the story, said Jim McGregor, principal analyst at Tirias Research.

"There are supply constraints in substrates and silicon wafers, and the company has to pay higher prices for those. Limited capacity and materials have increased costs of making chips," McGregor said.

TSMC makes computing chips on cutting edge nodes. The revenue opportunity is strong in chips for non-computing areas like auto and manufacturing, which is why TSMC is building new factories on older nodes, McGregor said.

"TSMC's participation in the global automotive IC market is only about 14%, and we are doing our part to support our automotive customers with what they need. However, we cannot solve the entire industry's supply challenge," Wei said on the call. ®

Similar topics


Other stories you might like

  • Saved by the Bill: What if... Microsoft had killed Windows 95?

    Now this looks like a job for me, 'cos we need a little, controversy... 'Cos it feels so NT, without me

    Veteran Microsoft vice president, Brad Silverberg, has paid tribute to former Microsoft boss Bill Gates for saving Windows 95 from the clutches of the Redmond Axe-swinger.

    Silverberg posted his comment in a Twitter exchange started by Fast co-founder Allison Barr Allen regarding somebody who'd changed your life. Silverberg responded "Bill Gates" and, in response to a question from senior cybersecurity professional and director at Microsoft, Ashanka Iddya, explained Gates' role in Windows 95's survival.

    Continue reading
  • UK government opens consultation on medic-style register for Brit infosec pros

    Are you competent? Ethical? Welcome to UKCSC's new list

    Frustrated at lack of activity from the "standard setting" UK Cyber Security Council, the government wants to pass new laws making it into the statutory regulator of the UK infosec trade.

    Government plans, quietly announced in a consultation document issued last week, include a formal register of infosec practitioners – meaning security specialists could be struck off or barred from working if they don't meet "competence and ethical requirements."

    The proposed setup sounds very similar to the General Medical Council and its register of doctors allowed to practice medicine in the UK.

    Continue reading
  • Microsoft's do-it-all IDE Visual Studio 2022 came out late last year. How good is it really?

    Top request from devs? A Linux version

    Review Visual Studio goes back a long way. Microsoft always had its own programming languages and tools, beginning with Microsoft Basic in 1975 and Microsoft C 1.0 in 1983.

    The Visual Studio idea came from two main sources. In the early days, Windows applications were coded and compiled using MS-DOS, and there was a MS-DOS IDE called Programmer's Workbench (PWB, first released 1989). The company also came up Visual Basic (VB, first released 1991), which unlike Microsoft C++ had a Windows IDE. Perhaps inspired by VB, Microsoft delivered Visual C++ 1.0 in 1993, replacing the little-used PWB. Visual Studio itself was introduced in 1997, though it was more of a bundle of different Windows development tools initially. The first Visual Studio to integrate C++ and Visual Basic (in .NET guise) development into the same IDE was Visual Studio .NET in 2002, 20 years ago, and this perhaps is the true ancestor of today's IDE.

    A big change in VS 2022, released November, is that it is the first version where the IDE itself runs as a 64-bit process. The advantage is that it has access to more than 4GB memory in the devenv process, this being the shell of the IDE, though of course it is still possible to compile 32-bit applications. The main benefit is for large solutions comprising hundreds of projects. Although a substantial change, it is transparent to developers and from what we can tell, has been a beneficial change.

    Continue reading
  • James Webb Space Telescope has arrived at its new home – an orbit almost a million miles from Earth

    Funnily enough, that's where we want to be right now, too

    The James Webb Space Telescope, the largest and most complex space observatory built by NASA, has reached its final destination: L2, the second Sun-Earth Lagrange point, an orbit located about a million miles away.

    Mission control sent instructions to fire the telescope's thrusters at 1400 EST (1900 UTC) on Monday. The small boost increased its speed by about 3.6 miles per hour to send it to L2, where it will orbit the Sun in line with Earth for the foreseeable future. It takes about 180 days to complete an L2 orbit, Amber Straughn, deputy project scientist for Webb Science Communications at NASA's Goddard Space Flight Center, said during a live briefing.

    "Webb, welcome home!" blurted NASA's Administrator Bill Nelson. "Congratulations to the team for all of their hard work ensuring Webb's safe arrival at L2 today. We're one step closer to uncovering the mysteries of the universe. And I can't wait to see Webb's first new views of the universe this summer."

    Continue reading
  • LG promises to make home appliance software upgradeable to take on new tasks

    Kids: empty the dishwasher! We can’t, Dad, it’s updating its OS to handle baked on grime from winter curries

    As the right to repair movement gathers pace, Korea’s LG has decided to make sure that its whitegoods can be upgraded.

    The company today announced a scheme called “Evolving Appliances For You.”

    The plan is sketchy: LG has outlined a scenario in which a customer who moves to a locale with climate markedly different to their previous home could use LG’s ThingQ app to upgrade their clothes dryer with new software that makes the appliance better suited to prevailing conditions and to the kind of fabrics you’d wear in a hotter or colder climes. The drier could also get new hardware to handle its new location. An image distributed by LG shows off the ability to change the tune a dryer plays after it finishes a load.

    Continue reading
  • IBM confirms new mainframe to arrive ‘late’ in first half of 2022

    Hybrid cloud is Big Blue's big bet, but big iron is predicted to bring a welcome revenue boost

    IBM has confirmed that a new model of its Z Series mainframes will arrive “late in the first half” of 2022 and emphasised the new device’s debut as a source of improved revenue for the company’s infrastructure business.

    CFO James Kavanaugh put the release on the roadmap during Big Blue’s Q4 2021 earnings call on Monday. The CFO suggested the new release will make a positive impact on IBM’s revenue, which came in at $16.7 billion for the quarter and $57.35bn for the year. The Q4 number was up 6.5 per cent year on year, the annual number was a $2.2bn jump.

    Kavanaugh mentioned the mainframe because revenue from the big iron was down four points in the quarter, a dip that Big Blue attributed to the fact that its last mainframe – the Z15 – emerged in 2019 and the sales cycle has naturally ebbed after eleven quarters of sales. But what a sales cycle it was: IBM says the Z15 has done better than its predecessor and seen shipments that can power more MIPS (Millions of Instructions Per Second) than in any previous program in the company’s history*.

    Continue reading

Biting the hand that feeds IT © 1998–2022