TSMC Will Spend Billions To Stay Ahead, Analyst Says

(CTN News) – TSMC will have to spend heavily on capital expenditures due to aggressive spending by Samsung Foundry, the chipmaking division of the Korean chaebol Samsung.

As TSMC prepares for its third quarter earnings report early this week, all eyes are on the company as macroeconomic shocks take down heavy hitters like Advanced Micro Devices, Inc (AMD), NVIDIA Corporation, and Intel Corporation.

Capital expenditures at TSMC will be deferred to 2023 as a result of supply chain constraints

An analyst quoted by the United Daily News (UDN) thinks TSMC’s capital expenditure in 2023 will be another record.

It’ll come despite cost increases and a slowdown in demand for its customers, which should instead force the firm to invest wisely in capacity so that machines don’t sit idle.

Samsung’s aggressive spending is a key factor in TSMC’s capital expenditure decision.

The Korean firm, whose manufacturing technologies were caught in claims of fraudulent behavior earlier this year, was quick to announce 3-nanometer manufacturing earlier this year, and followed this with 2-nanometer production, which also meets TSMC’s 2-nanometer production schedule.

Samsung plans to spend $355 billion on its semiconductor and biotechnology businesses over the next five years to back up these announcements.

According to reports, most of this money will go to chip manufacturing, especially because of the high costs of setting up expensive machines.

IC Insights says semiconductor capital spending is slowing. According to the research firm, the industry will spend $185 billion collectively in 2023 due to a slowing macroeconomic environment and oversupply.

Compared with last year’s 21% growth, this year’s growth will be 35%, but it’s still double-digit growth for the third straight year.

Chip spending dropped in 2019 but picked up after the Coronavirus pandemic due to record demand for personal computing, enterprise, and automotive products.

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