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TSMC Builds Chip Factory in Japan Faced with Rapidly Increasing Demand

The Japanese factory is the latest expansion plan for TSMC, the world’s largest contract chip maker, as demand for semiconductors used in products such as automobiles and electronic devices is skyrocketing. Construction will begin next year and will be mass-produced in late 2024, according to company executives.

Meanwhile, TSMC expects its capacity to remain tight until 2022, CEO CCWei said.

“We believe we can better meet the needs of our customers by expanding our global manufacturing footprint,” Wei said in a statement Thursday, without giving details of the new facility. ..

Earlier this year, TSMC promised to spend $ 100 billion over three years developing new technologies and equipment. The company has also built a $ 12 billion chip factory in Arizona and is expanding its production capacity in Nanjing, China. The company did not disclose the cost of the New Japan plant, but said it exceeded its $ 100 billion pledge.

Other chip makers including Intel Ltd

INTC 0.17%

, Samsung Electronics Ltd

, And GlobalFoundries Inc. again announced their ambitious capital investment plans this year.

TSMC said the new plant will focus on less advanced chips commonly used in components such as automobiles and sensors.Sony Group in Japan Ltd

Will supply to Apple Ltd

According to people familiar with this issue, the iPhone with the image sensor used in the camera will gain market share at the new factory. TSMC declined to comment.

Wei said the company did not rule out building more facilities in places like Europe.

The number of semiconductors in modern automobiles can exceed 1000, from ignition to braking systems. As the global chip shortage prolongs, automakers from General Motors to Tesla are forced to adjust production and rethink their entire supply chain. Illustration / Video: Sharon Shi

Both TSMC’s quarterly earnings and net income reached record quarters ending September 30th, boosted by strong chip demand. Net income was up 14% year-on-year to $ 5.57 billion and revenue was up 16% to $ 14.78 billion.

The global tip shortage has had a widespread impact on manufacturing and economic growth. Some of the world’s largest automakers have had to close their factories to reduce production due to the lack of semiconductors needed for functions such as air conditioning and engine control. As a result, car companies lost billions of dollars in revenue and sales declined despite strong demand.

TSMC has emerged as an important player in the turmoil of the market, increasing production of older technology chips used in automobiles. According to the company, this year’s auto chip production is expected to increase by 60% compared to last year.

“We are playing our part in helping our automotive customers do what they need, but we can’t solve the supply challenges across the industry,” Wei said. He said the company accounts for about 15% of the global automotive chip market.

The company’s third-quarter revenue from Autochip was up 5% from the previous quarter, but accounted for 4% of total revenue. Smartphone chips accounted for 44% of total sales.

Automakers are preparing for long-term distress as semiconductors wait longer and prices rise. Chip shortages have spread to other industries, disrupting production items such as smartphones, home appliances and medical devices, and raising prices for final products.

“”“We cannot solve the supply challenges of the entire industry.”


— TSMC CEO CCWei

TSMC recently raised customer prices by as much as 20%, the Wall Street Journal reported.

Based in Taiwan’s New State, TSMC produces almost all of the world’s most advanced chips on the island, according to industry analysts. The world, which relies on Taiwan for advanced chip manufacturing, raises concerns about the safety of its semiconductor supply chain amid heightened political tensions between the autonomous islands and China.

Earlier this month, Taiwan’s defense minister said he was facing the most dire military challenges from China in decades as Chinese aircraft sorties increased near the island.

Advanced chip manufacturing contributed more than half of TSMC’s quarterly revenue. According to research firm Trendforce, the company generally accounts for 55% of the global foundry market in terms of revenue.

Write to Stephanie Yang at stephanie.yang@wsj.com and Yang Jie at jie.yang@wsj.com

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TSMC Builds Chip Factory in Japan Faced with Rapidly Increasing Demand

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