TSMC to expand Taiwan fab with $16B investment

Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest chip foundry, announced its plan to expand an existing fab in Taiwan to the tune of NT$500 billion ($15.9 billion).

The company provided no more specific timeframe for the expansion other than to say the investment would be over several years, with the amount in each year based on expected demand for capacity.

The planned investment is in the Central Taiwan Science Park, near the city of Taichung. TSMC said it expects the investment to create an additional 5,000 jobs at the site that currently employs more than 3,400 people.

"Taichung is a place where TSMC is well established in Taiwan," TSMC Co-CEO C.C. Wei said in a statement. "It's an important base where we not only want to develop advanced technology, continue revenue growth and reach new milestones, but more importantly, create a world-class green enterprise. "

The company's fab in central Taiwan in 2014 had an output worth NT$200 billion ($6.3 billion) last year, accounting for 28 per cent of TSMC's total production last year.

TSMC has raised its capital expenditure budget for 2015 to $11.5-12 billion, an increase of 11.5-20 per cent compared with 2014, mainly due to its confidence in demand for advanced geometries.

TSMC's sales revenue in 2015 will likely rise by "several percentage points" more than the estimated industry average of 12 per cent, according to TSMC co-CEO Mark Liu, speaking at an earnings event in January.

For the first quarter of 2015, TSMC forecast sales revenue ranging from NT$221 billion ($7 billion) to NT$224 billion ($7.1 billion), about 50 per cent higher than the first quarter of 2014.

While TSMC may grow sales by a mid-teen percentage in 2015, its year-on-year momentum has peaked and will slow materially in the second half of 2015, according to Maybank Kim Eng analyst Warren Lau.

TSMC's commitment to invest in Taiwan comes as industry analysts expect China to quickly expand domestic production during this decade. Taiwan's government has restricted investment by its chipmakers in China on concerns about losses of jobs and technology.

Taiwan and China have been political rivals since 1949, when soldiers of the Nationalist Party were defeated by an army led by the Communist Party in China, forcing the Nationalists to leave mainland China and establish a new government in Taiwan.

- Alan Patterson
??EE Times