Sat, 10 Jun 2023

TAIPEI, Taiwan: Chip manufacturer Taiwan Semiconductor Manufacturing Company (TSMC), a supplier of Apple, Qualcomm and other major tech companies, has allocated some $44 billion to increase its manufacturing capacity in 2022, according to Reuters.

In its latest earnings release, TSMC said it predicts capital spending to be between $40 and $44 billion in 2022, up from $30 billion in 2021.

According to the Financial Times, the record figure indicates the company does not expect demand for chips to slow down, despite some analyst warnings of potential slowdowns in related sectors, such as smartphones.

TSMC predicts any slowdown will be made up by more product categories, such as cars and factory equipment beginning to require high performance silicon.

In comments reported by the Financial Times, TSMC CEO CC Wei said, "We observe end-market demand may slow down in terms of units, but silicon content is increasing."

TSMC expects demand to remain high, regardless of the ongoing global chip shortage, with Wei noting it "may or may not persist" in 2022, Nikkei Asia reports.

The company expects the total revenue of the chip manufacturing industry to grow 20 percent this year, but it also expects its own revenue, which grew by 25 percent last year, to outperform that figure.

Despite one of its customers, Intel, competing with it in the contract chip manufacturing business under new CEO Pat Gelsinger, TSMC still expects growth.

"Intel trails both of them in technology prowess, forcing the California company into the ironic position of relying on TSMC to produce its best chips. Gelsinger is confident that he can catch up. Maybe he will, but there is no way the firm will be able to expand capacity and economies of scale to the point of being financially competitive. Put another way, Intel will need to sacrifice margins to gain the volume needed to fill the fabs he too wants to build," said Bloomberg's Tim Culpan.

The considerable demand for chips amidst the chip shortage has helped enhance TSMC's stature as one of the largest and most important companies in the world.

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