In what seems like a sharp response to Intel’s move to regain its market position, major Taiwan computer chip maker Taiwan Semiconductor Manufacturing Co. (TSMC) plans to invest $100 billion in the next three years in expanding its manufacturing capacity and supporting research and development, the company said Thursday.
The world’s biggest contract producer of semiconductors, TSMC said it anticipates faster growth thanks to long-term trends like the introduction of next-generation telecommunications and high-performance computing. The coronavirus pandemic, meanwhile, is revving up demand for electronic devices as the world relies increasingly on digitalization.
“TSMC is working closely with our customers to address their needs in a sustainable manner,” the company told AP in an emailed statement. It did not give further details about planned investments.
Intel, South Korea’s Samsung Electronics and other chip makers also have been boosting investments to meet rising demand and joust for market share in advanced semiconductors.
Last week, Intel announced plan to invest $20 billion to build two factories in Arizona and to open up its factories to outside customers, as demand for chips grows.
The move will directly challenge the two other companies in the world that can make the most advanced chips, Taiwan’s Semiconductor Manufacturing Co Ltd (TSMC) and Korea’s Samsung Electronics Co Ltd.
It will also aim to tilt a technological balance of power back to the United States and Europe as government leaders on both continents have become concerned about the risks of a concentration of chipmaking in Taiwan given tensions with China.
TSMC makes processor chips for major brands like Apple Inc. and Qualcomm Inc. Surging demand pushed its revenue 18% higher in January-February from a year earlier, it reported earlier. The company is predicting continued growth in demand for semiconductor technology as the COVID-19 pandemic further accelerates online activities.
“We are entering a period of higher growth as the multiyear megatrends of 5G and high-performance computing are expected to fuel strong demand for our semiconductor technologies in the next several years,” the company said.
Most semiconductors used in smartphones, medical equipment, computers and other products are made in Taiwan, South Korea and China.
TSMC operates a semiconductor wafer fabrication facility in Camas, Washington, and design centers in San Jose, California, and Austin, Texas.
It has announced plans to invest $3.5 billion in a second U.S. manufacturing site, in North Phoenix, Arizona, as concern grows over heavy American reliance on sources in Asia for high-tech components.
TSMC’s move will likely put a dent on Intel’s efforts to bounce back. Intel has watched its influence and market share in the semiconductor industry dwindled under the shadows of TSMC, Samsung, Nvidia and other chipmakers.
Last week’s announcement was Intel’s biggest move to break off the shackles and reinvent itself in a market increasingly being dominated by its rivals, following the appointment of their new chief executive Pat Gelsinger.
However, the shortage of semiconductor chips has opened new opportunity for growth for every company in the industry. Automakers are increasingly shutting down production as scarcity of chips persists. With the surging demand, every chipmaker has the potential to increase its supply chain.