Taiwan Semiconductor Manufacturing Co. board of directors approved US$9.2 billion today, to expand 5nm nodes capacity and increase specialty technologies capacity by 12% this year.
Taking into account the approval of US$11.7 billion for the first quarter, so far the foundry has reached 60% of their yearly US$30 billion budget. In regards to TSMC’s capacity expansion plans, this year’s budget is likely to be further lifted.
TSMC has previously announced investing US$100 billion on a three-year plan which TSMC CEO CC Wei reiterated at the technology symposium last week to accelerate expansion five times faster. How is TSMC going to spend this unprecedented astronomical sum of money to continue staying ahead of the industry?
Among this year’s US$30 billion budget, 80% is allocated for advanced nodes, and the rest is sliced in half to be used in more advanced nodes and expand capacity in the specialty technologies, respectively.
If this proportion remains throughout 2022 and 2023, then roughly US$24 billion, US$26.8 billion and 29.2 billion would be allocated in developing advanced nodes, each year summing up to US$80 billion.
In the first quarter, TSMC 7nm nodes take up 35% of the semiconductor sales, breaking the records, and will continue to increase 25,000 units each month. The 5nm node capacity is seeking to reach 120,000 units by the end of 2021.
The more advanced 3nm nodes are to undertake risk production by the second half of 2021 beginning from 15,000 units already and build up to 60,000 units by 2022, and by the time the Arizona fab that produces 5nm nodes is completed in 2023, the 3nm nodes will increase monthly capacity by 45,000 units, along with the 2nm nodes entering risk production and starting the cycle all over again.
Needless to say, running production cycles requires a lot of capital, analysis shows in 2021, US$4.6 billion, 15.2 billion, and 6.4 billion will be allocated to 7nm, 5nm, and 3nm respectively. While it sums up to US$26.3 billion, exceeding the previous estimated US$24 billion, the 7nm nodes may be budgets saved up from the previous year, or delaying the 3nm nodes expansion to 2022.
TSMC further announced today that total revenue in May rose 0.9% from April to US$40 billion, slightly lower than expectations, but still a significant 19.8% yearly increase. Based on TSMC’s prediction to reach US$12.9 billion for the second quarter, the company will have to generate US$50 billion this month to reach its estimation.