The world's largest chipmaker is planning a massive spending spree

(Image credit: TSMC)

Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest contract chipmaker, is planning a record-breaking spending spree in 2021.

On an earnings call, the company announced plans to boost capital expenditures (CapEx) by up to $28 billion this year, in a push to expand production capacity and further develop its technology.

The chip giant said heavy investment is required to address the global semiconductor shortage, created by a spike in demand among car and electronics manufacturers, and to capitalize on opportunities around 5G and high performance computing (HPC).

TSMC earnings

On the same call with investors, TSMC also announced record-high revenue and profit for Q4 2020; gross revenue reached $12.68 for the quarter, up 22% year-on-year, while net profit rose by 23% to reach $5.1 billion.

The company said it had benefited handsomely from a surge in demand for electronics brought about by the pandemic and remote working explosion, as well as the rise of 5G-enabled devices. Despite vaccine rollout and prospects of a slightly more normal 2021, TSMC believes demand will remain high as suppliers seek to stockpile components.

To meet demand, TSMC had previously set out plans to build a $12 billion foundry in Arizona, USA. Mark Liu, TSMC Chairman, confirmed the goal is still in place, but will depend on the economic situation and other factors.

The firm is also preparing to bolster the production capabilities of its facility in Nanjing, eastern China, despite announcing in May that it would terminate its relationship with telecoms and electronics giant Huawei.

In Q1 2021, TSMC said it expects to take in between $12.7 billion and $13 billion in revenue, an increase of almost $3 billion over forecasts for the same quarter last year.

“Moving into first quarter 2021, we expect our business to be supported by HPC-related demand, recovery in the automotive segment, and a milder smartphone seasonality than in recent years,” said Wendell Huang, TSMC CFO.

According to Liu, demand for semiconductors in the HPC industry will soon outstrip the smartphone sector, becoming the main driver of growth for the company in the years to come.


Joel Khalili
News and Features Editor

Joel Khalili is the News and Features Editor at TechRadar Pro, covering cybersecurity, data privacy, cloud, AI, blockchain, internet infrastructure, 5G, data storage and computing. He's responsible for curating our news content, as well as commissioning and producing features on the technologies that are transforming the way the world does business.