Thread by @jpr007

NOW HEAR THIS - SEMICONDUCTORS

In 2021 TSMC expects to invest between $25 billion and $28 billion in capital expenditures compared with $17.2 billion last year

TSMC’s 2021 capex includes investment for construction of its new facility in Arizona
eetimes.com/tsmc-to-raise-…

The company has acquired 1,100 acres of land near the city of Phoenix as part of a long-term plan to build a production site on the same scale as TSMC’s so-called “megafabs” in Taiwan that are the mainstay of the company’s production

TSMC and next-door neighbor UMC said in January that their capacity is fully loaded, and the best they can do is to reallocate production to meet demand from global automakers like Volkswagen and Toyota, just to name a few

The carmakers are forced to take a place in the queue behind bigger chip buyers like Apple and Qualcomm.

Chip shortages are likely to erase $61 billion of expected sales for automakers, while the impact to the electronics industry could be far larger, according to Bloomberg

Rival foundry United Microelectronics Corp. UMC has increased its capex budget for 2021 to $1.5 billion from $1 billion in 2020

Taiwan Semiconductor Manufacturing Co. TSMC said that it plans two sales of bonds that would raise about $9 billion to expand production, possibly helping to ease a critical shortage of silicon chips

In a board meeting on 9 February the world’s largest chip foundry approved the issuance of corporate bonds in Taiwan for as much as NT$120 billion (approximately $4.4 billion) . . .

. . . and agreed to provide a guarantee to subsidiary TSMC Global to issue US dollar-denominated corporate bonds for up to $4.5 billion that would fund capacity expansion as well as pollution-prevention measures

In the board meeting TSMC also approved the establishment of a wholly owned subsidiary in Japan to expand research on materials for three-dimensional chips, with a paid-in capital of up to ¥18.6 billion (approximately $186 million)

The announcement follows an unconfirmed report that TSMC plans to open its first overseas chip-packaging facility in Japan.

The company is running full tilt to meet demand that exceeds its production capacity

TSMC finds itself at the center of an increasingly geopolitical scramble to secure supplies of chips for everything from automobiles to smartphones

Government leaders from Germany to the US have recently urged Taiwan to help solve the chip shortfall

“Soaring demand from tablets, laptops and electric cars are causing some of the toughest conditions for smartphone component supply in many years,” said Neil Mawston, an analyst with Strategy Analytics

He said prices for phone parts such as chips and displays have jumped as much as +15% in the past two quarters