The chief financial officer of Taiwan Semiconductor Manufacturing (TSM) stated in an interview that the company is racing to boost capacity at its Arizona facility, citing a sustained, multi-year "super cycle" of demand from its clients.
Amid a structural surge in demand within the artificial intelligence industry, TSMC is intensifying its US chip manufacturing footprint with a massive new investment of $100 billion, significantly expanding its scale in Arizona.
Following this additional investment, TSMC's total planned investment in Arizona has climbed to $265 billion. This large-scale expansion, fueled by AI demand, has also prompted the company to raise its full-year capital expenditure forecast to a range of $600 billion to $640 billion.
The CFO stated that this additional investment is backed by robust customer orders in the US market and strong support from the US government.
"We are facing a sustained, long-term, strong industry demand, and we have absolutely no intention of giving up market share to other competitors," the CFO said. "As long as the long-term mega-trend of artificial intelligence remains unchanged, we can continue to create profit growth for our shareholders."
The CFO added that to meet surging customer demand, TSMC is fully optimizing its advanced process capacity, including rapidly converting 5-nanometer production lines to the more cutting-edge 3-nanometer process.
The nanometer figure represents the size of a single transistor on a chip. The smaller the transistor size, the more transistors can be integrated onto a single chip. Generally, a smaller nanometer process yields chips with higher performance and better power efficiency.
Regarding the progress of TSMC's US fab construction, the CFO disclosed that the Phase 1 facility utilizing the 4-nanometer process has already commenced commercial production.
"In the coming quarters, the capacity scale of this fab will continue to expand," the CFO said. The 2-nanometer process began contributing to revenue in the second quarter of this year and is set to become a new growth driver for the company in the third quarter.
The CFO also acknowledged that the construction cost of a US wafer fab is 4 to 5 times that of one in Taiwan. Although short-term profit dilution may intensify as overseas production scales up, this overseas expansion will ultimately further the development of the US domestic semiconductor supply chain ecosystem.
Regarding the allocation of the new $100 billion investment, the CFO stated, "This investment will cover both front-end wafer fabrication plants and back-end advanced packaging facilities."
On the day of its earnings release, TSMC's stock price closed up more than 1%. However, the stock plunged 7% last Friday and has gained approximately 48% year-to-date.
Commenting on the company's stock performance, the CFO noted that TSMC cannot control financial market movements. "What we can do is focus on strengthening the company's own operational fundamentals," he added, stating that despite significant cost increases for various components across the industry, TSMC's strategic focus on the high-end market has left it largely unscathed.
The chip foundry is positioning itself across various future growth areas. Discussing the prospects for physical AI, he indicated that TSMC's recent establishment of an image sensor joint venture with Sony is one of the company's strategic moves to develop specialized technology and help customers achieve long-term business growth.
Comments