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TSMC Pours $3.54 Billion Into Upgrading 7nm Technology, Although Cryptocurrency Mining Demand Stalls

Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest dedicated independent semiconductor manufacturer, has approved the appropriation of roughly $3.54 billion on November 13 for new facility construction, the upgrade to leading-edge 7-nanometre technology, and related capacity expansions,DIGITIMES reported on Wednesday.

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Industry analyst believes that TSMC’s additional input will accelerate the mass production of 7nm chips, which will ensure the company to prevail in a competitive market. Currently, TSMC has had far more luck attracting clients than the electronics giant Samsung has in spite of both companies having a 7nm process.

According to a statement released by TSMC’s board , nearly $3.37 billion of the newly-approved capital expenditure will be poured into building new facilities, upgrading 7nm process technology, converting certain logic technology capacity to special technology capacity as well as R&D capital investments and sustaining capital expenditures for first-quarter 2019.

Besides, another appropriation of approximately $17.32 million has also been approved to fund the capitalized leasehold properties in the first half of 2019.

As demand for semiconductors used to mine bitcoin and other cryptocurrencies stalls, the Taiwan-based contract maker of chips reduced its annual growth forecast in October. TSMC had to lower this year’s sales outlook to 6.5% from earlier estimates of between 7% and 9%, according to Forbes.

But the company bets on the advanced 7-nanometre technology for its sale rebound in the coming year. It is estimated that the revenue from 7nm chips that accounted for over 20 percent of the sum this quarter will see a sharp rise soon. TSMC claimed it will see a robust 7nm chip demand from clients and will have over 100 chip designs with both its 7nm and an enhanced version with EUV by the end of 2019.

TSMC estimates that its smartphone business should grow in the mid-single digits over the coming five years, while the high-performance computing, automotive and internet of things segments should expand by double-digits during that time. The company is confident that it will  maintain the annual growth rate of revenue at 5 to 10 percent in the next five years.

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