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.
Nvidia Corp’s demand for advanced packaging from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) remains strong though the kind of technology it needs is changing, Nvidia CEO Jensen Huang (黃仁勳) said yesterday, after he was asked whether the company was cutting orders. Nvidia’s most advanced artificial intelligence (AI) chip, Blackwell, consists of multiple chips glued together using a complex chip-on-wafer-on-substrate (CoWoS) advanced packaging technology offered by TSMC, Nvidia’s main contract chipmaker. “As we move into Blackwell, we will use largely CoWoS-L. Of course, we’re still manufacturing Hopper, and Hopper will use CowoS-S. We will also transition the CoWoS-S capacity to CoWos-L,” Huang said
Nvidia Corp CEO Jensen Huang (黃仁勳) is expected to miss the inauguration of US president-elect Donald Trump on Monday, bucking a trend among high-profile US technology leaders. Huang is visiting East Asia this week, as he typically does around the time of the Lunar New Year, a person familiar with the situation said. He has never previously attended a US presidential inauguration, said the person, who asked not to be identified, because the plans have not been announced. That makes Nvidia an exception among the most valuable technology companies, most of which are sending cofounders or CEOs to the event. That includes
INDUSTRY LEADER: TSMC aims to continue outperforming the industry’s growth and makes 2025 another strong growth year, chairman and CEO C.C. Wei says Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), a major chip supplier to Nvidia Corp and Apple Inc, yesterday said it aims to grow revenue by about 25 percent this year, driven by robust demand for artificial intelligence (AI) chips. That means TSMC would continue to outpace the foundry industry’s 10 percent annual growth this year based on the chipmaker’s estimate. The chipmaker expects revenue from AI-related chips to double this year, extending a three-fold increase last year. The growth would quicken over the next five years at a compound annual growth rate of 45 percent, fueled by strong demand for the high-performance computing
TARIFF TRADE-OFF: Machinery exports to China dropped after Beijing ended its tariff reductions in June, while potential new tariffs fueled ‘front-loaded’ orders to the US The nation’s machinery exports to the US amounted to US$7.19 billion last year, surpassing the US$6.86 billion to China to become the largest export destination for the local machinery industry, the Taiwan Association of Machinery Industry (TAMI, 台灣機械公會) said in a report on Jan. 10. It came as some manufacturers brought forward or “front-loaded” US-bound shipments as required by customers ahead of potential tariffs imposed by the new US administration, the association said. During his campaign, US president-elect Donald Trump threatened tariffs of as high as 60 percent on Chinese goods and 10 percent to 20 percent on imports from other countries.
RSS