TSMC to Spend $100B on Fabs and R&D Over Next Three Years: 2nm, Arizona Fab & More
TSMC this week has announced plans to spend $100 billion on new production facilities as well as R&D over the next three years. The world's largest contract maker of chips says that its fabs are currently working at full load, so to meet demand for its services going forward it will need (much) more capacity. Among TSMC's facilities to go online in the next three to four years are the company's fab in Arizona as well as its first 2nm-capable fab in Taiwan.
[...] TSMC's capital expenditures (CapEx) budget last year was $17.2 billion, whereas its R&D budget was $3.72 billion, or approximately 8.2% of its revenue. This year the company intends to increase its CapEx to somewhere in the range of $25 to $28 billion, which would make for a 45% to 62% year-over-year increase in that spending. The company's R&D spending will also rise as its revenue is expected to grow. In total, TSMC plans to invest around $30 billion or more on CapEx and R&D this year. Taken altogether, if the company intends to spend around $100 billion from 2021 through 2023, its expenditures in the next two years will be roughly flat with 2021, something that should please its investors.
SK Hynix to Build $106 Billion Fab Cluster: 800,000 Wafer Starts a Month
Capping off a busy week for fab-related news, South Korea authorities this week gave SK Hynix a green light to build a new, 120 trillion won ($106.35 billion) fab complex. The fab cluster will be primarily used to build DRAM for PCs, mobile devices, and servers, using process technologies that rely on extreme ultraviolet lithography (EUV). The first fab in the complex will go online in 2025.
[...] The new fabs will be used to make various types of DRAM using SK Hynix's upcoming production technologies that will use extreme ultraviolet (EUV) lithography. And with a start date still years away, we're likely looking at a fab that will be used to manufacture DDR5, LPDDR5X, and other future types of DRAM.
See also: TSMC bumps spending up 50% to meet increased demand
(Score: 0) by Anonymous Coward on Sunday April 04 2021, @11:56AM (6 children)
Higher prices, of course.
(Score: 0) by Anonymous Coward on Sunday April 04 2021, @12:24PM (3 children)
Except all this extra capacity is going to create excess supply, driving prices down... especially when new variants of COVID wipe out 50% of the population.
(Score: 1) by khallow on Sunday April 04 2021, @03:27PM (2 children)
Because? Present variants of covid are at least two orders of magnitude shy of being able to do that - even if everyone got it. What makes the new variants so special?
(Score: 0) by Anonymous Coward on Sunday April 04 2021, @04:36PM (1 child)
Wait until you see the new Spring 2021 models from Wuhan Labs!
(Score: 1) by khallow on Sunday April 04 2021, @05:21PM
(Score: 0) by Anonymous Coward on Sunday April 04 2021, @12:41PM
Given China's actions in Hong Kong and the South China Sea, higher prices could be worth it.
The cost is a reasonable percentage of cash flow and outside sources will undoubtly help.
While the move to production diversity seems essential, history shows it may lead us to an overcapacity situation.
Setting up a bleeding edge line is a non-trivial exercise. It ain't over till these are running with good yields.
Paying is not the main issue here, it appears that China's efforts with force are turning out to have been a shot in the foot.
(Score: 3, Informative) by takyon on Sunday April 04 2021, @02:31PM
TSMC Rumored To Hike Chip Prices By 25% By 2021 End As Alleged Workers Receive No Overtime Pay [wccftech.com]
Wafer prices aren't that significant when compared to the prices of the more expensive consumer products (e.g. the Ryzen 7 5800X), but it could have an larger effect on the budget end of things (e.g. the Ryzen 3 3100, which doesn't make much sense from a yield perspective - "7nm" yields are too good).
However, as Apple gets first dibs on increasingly smaller nodes, their leftovers will eventually become the budget nodes. By the time AMD is making chips on TSMC "3nm", "7nm" will decrease in price and will remain just fine for cheaper products or I/O chiplets.
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(Score: 2) by bzipitidoo on Sunday April 04 2021, @01:14PM (6 children)
I know chip fabrication isn't cheap, but $100 billion? I wondered if that could be an error, and they meant $100 million. $100 million is plenty huge. But no, seems they mean billion, with a B. The Apollo moon landing project was "only" $28 billion (about $280 billion after adjusting for inflation), how could chip fabrication be so expensive as to rival that?
(Score: 0) by Anonymous Coward on Sunday April 04 2021, @01:28PM
(Score: 2, Funny) by Anonymous Coward on Sunday April 04 2021, @01:55PM (2 children)
>> how could chip fabrication be so expensive as to rival that?
The moon landing project only required a few uniforms and a soundstage, while chip fabrication requires numerous rolls of Rubylith and gallons of ultrapure sulfuric acid.
(Score: 0) by Anonymous Coward on Sunday April 04 2021, @02:23PM
The funny part is NASA advised Stanley Kubrik on what the moon should look like for 2001, then went and copied the set because it seemed so realistic for their own moon landing. It looked more "moon" than the actual moon.
(Score: 3, Interesting) by DECbot on Monday April 05 2021, @11:05AM
Sulfuric acid isn't nearly deadly enough to be used in actual chip fabrication. If anything, that's just used as a cleaning agent on the equipment. Actual process chemicals are fun substances like dichlorosilane, phosphine, hexachlorodisilane, Chlorine trifluoride, pyridine, 100% ammonia (probably the safest active agent after the metric megatons of nitrogen used), and tetraethoxysilane (TEOS), which has a nauseating smell best described as canned cancer. Specifically sulfuric acid looks tame compared to DCS. The only ppe you need is goggles, gloves, respirator, and an apron. On the contrary, trace amounts of DCS are fatal if inhaled, and it bursts into a bright orange flame when exposed to atmosphere. Sulfur acid required an ignition source to even start burning.
cats~$ sudo chown -R us /home/base
(Score: 4, Interesting) by takyon on Sunday April 04 2021, @02:47PM
Think of it as the most major practical application of nanotechnology.
Last time I checked, fab cost was approaching $20 billion, and they even have a "law" for it [wikipedia.org]. It's probably going to get much worse as precise 3D stacking becomes a key operation for making almost all processors.
A restart of Moon activities using reusable Starship would be a lot cheaper than building semiconductor fabs.
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(Score: 1) by khallow on Sunday April 04 2021, @03:38PM
It's a similar-sized and more complex operation than Apollo, for starters. Apollo got the higher price tag because they were rushing stuff, employing a lot of people, and being sloppy with the spending. The company, TSMC itself employs almost 60k people. In addition, it consumes considerable resources (electricity, ultra-pure silicon, etc) and generate products of immense value (and far more complex than all of the gear combined of the Apollo program). That supply chain employs a lot of people as well. Finally, they have to build this all to exacting standards required. Yet a third army of people and resources.
(Score: 0) by Anonymous Coward on Sunday April 04 2021, @03:21PM (1 child)
i suppose i am just an "outlier" but the last time i bought a "chip" was probably when i bought a new toyota 2 years ago. and before that a micro wifi access point from tp-link (5Ghz ac)
since then i haven't bought anything "chip-like"...
so i am wondering where this increase in demand is coming from.
technically speaking there are plenty chips in a modern combustion engine car and tho the ones in a pure electrical car are different i see no reason why there need to be more of them chips in a electrical car ... so purely by " weight", having manufacturers scramble to get a piece of the tesla cake, electrical car manufacturing ain't the reason for chip short supply.
maybe it's coming from the "trade war" the previous pres has escalated, rather?
or, vague, a cessation of subsidies from the chinese government to small chinese chip manufacturers (woot? didnt make the news)?
however ... maybe it's not "chips" per se, but rather power electronics ... semi conductor stuff that works in the 500+ volt and 100+/amp range that is really in short supply (which would mean it's the car industry but not for the entertainment console or gps).
(Score: 2) by takyon on Sunday April 04 2021, @03:38PM
You mention Tesla. They use the usual chips as well as a self-driving chip [electrek.co] and a 10 teraflops Navi 23 GPU [tesmanian.com] for in-car gaming.
The major "driver" for new TSMC fabs is Apple. They want a new node roughly every year, even if it only offers minor improvements on the previous node ("4nm" is a good example [wccftech.com]). Those chips go into iPhone, iPad, and soon all of the Mac lineup.
Chinese companies (that aren't banned due to military links or geopolitics) still rely on TSMC. The latest example is this big GPU [tomshardware.com].
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(Score: 0) by Anonymous Coward on Sunday April 04 2021, @10:00PM (4 children)
Besides burning down cities and ramping up the war machine?
(Score: 3, Informative) by takyon on Sunday April 04 2021, @10:15PM
$12 billion of that, possibly more, is going to a new TSMC fab in Arizona.
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(Score: 0) by Anonymous Coward on Sunday April 04 2021, @10:24PM (1 child)
blowing up rocketstrying to go to Mars, assuming Sleepy Joe doesn't manage to shut them down.(Score: 0) by Anonymous Coward on Sunday April 04 2021, @10:48PM
Shut it down purely in the interest of preventing climate change. On Mars.
Don't worry about the project, they will still spend all the money.
(Score: 0) by Anonymous Coward on Sunday April 04 2021, @10:50PM
Phoenix was burning before people ever got there. It's April 4, and already 102-degrees.