Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) plans to allocate a larger portion, or about 9 percent, of its total revenue this year to research and development (R&D) on cutting-edge technologies to safeguard its technological lead amid intensifying competition, the chipmaker’s annual report said.
That could bring TSMC’s R&D budget to more than NT$110 billion (US$3.65 billion) if it reaches its goal of growing revenue by more than 15 percent annually this year — to at least NT$1.23 trillion.
This year’s spending would be a 20 percent increase over last year’s record-high R&D expenditure of NT$91.42 billion.
Photo: EPA-EFE
The bulk, or 70 percent, of this year’s R&D budget is to be spent on advanced technologies, including the 3 nanometer (nm) technology platform and applications, next-generation technologies and 3D IC for system-in-package modules, the report said.
TSMC, a pioneer in the semiconductor industry, said that it began R&D on 2nm technology last year, as it targets 5G-related applications and high-performance-computing devices.
“To maintain and strengthen TSMC’s technology leadership, the company plans to continue investing heavily in R&D,” the report said.
“The markets for TSMC’s foundry services are highly competitive. TSMC competes with other foundry service providers, as well as with a number of integrated device manufacturers,” the company said, referring to the competition it faces.
If TSMC is unable to effectively take on these new and aggressive competitors when it comes to technology, manufacturing capacity, product quality and customer satisfaction, it risks losing customers to these new contenders, the report said.
TSMC, which commands a 52 percent share of the world’s foundry market, competes primarily with Samsung Electronics Co for advanced technology orders, while its Chinese rival Semiconductor Manufacturing International Corp (SMIC, 中芯) is positioning itself to take a bite out of TSMC’s share in China.
TSMC last week said that it plans to increase production of 3nm technology in the second half of 2022, which would make it the foremost foundry offering the technology.
The chipmaker’s report also warned of possible negative effects resulting from the COVID-19 pandemic, saying that the coronavirus might interrupt the global semiconductor supply chain and disrupt some of its suppliers.
There could be downward adjustments in customer demand or production delays for TSMC products, due to forced closures, or partial operations, at factories and offices, the report said.
Due to fallout from the pandemic, the chipmaker expects the global semiconductor industry to see stagnant revenue this year, at best, it said, adding that the industry is expected to grow at a compound annual growth rate of 5 percent between last year and 2024.
The chipmaker also disclosed that company chairman Mark Liu (劉德音) and CEO C.C. Wei (魏哲家) received NT$293 million in compensation apiece last year, accounting for 0.085 percent of net profits last year, the report showed.
Last year, the company paid NT$1.545 billion in compensation to its high-ranking executives.
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
ADVERSARIES: The new list includes 11 entities in China and one in Taiwan, which is a local branch of Chinese cloud computing firm Inspur Group The US added dozens of entities to a trade blacklist on Tuesday, the US Department of Commerce said, in part to disrupt Beijing’s artificial intelligence (AI) and advanced computing capabilities. The action affects 80 entities from countries including China, the United Arab Emirates and Iran, with the commerce department citing their “activities contrary to US national security and foreign policy.” Those added to the “entity list” are restricted from obtaining US items and technologies without government authorization. “We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives,” US Secretary of Commerce Howard Lutnick said. The entities
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
Minister of Finance Chuang Tsui-yun (莊翠雲) yesterday told lawmakers that she “would not speculate,” but a “response plan” has been prepared in case Taiwan is targeted by US President Donald Trump’s reciprocal tariffs, which are to be announced on Wednesday next week. The Trump administration, including US Secretary of the Treasury Scott Bessent, has said that much of the proposed reciprocal tariffs would focus on the 15 countries that have the highest trade surpluses with the US. Bessent has referred to those countries as the “dirty 15,” but has not named them. Last year, Taiwan’s US$73.9 billion trade surplus with the US
RSS