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posted by janrinok on Monday January 17, @12:57AM   Printer-friendly [Skip to comment(s)]
from the hoping-for-no-dips-in-chips dept.

TSMC invests in new capacity despite forecasts chip demand will ease:

Taiwan Semiconductor Manufacturing Company plans to raise its capital expenditure by almost a third this year as the world's largest contract chipmaker defies analyst warnings of softening demand for technology gadgets.

TSMC expects capital expenditure to reach $44 billion this year, a 32 percent increase from the $30 billion spent in 2021 and triple the amount in 2019, the company said on Thursday.

The push underscores the outsized role semiconductors are coming to play in goods far beyond classical electronics products, from cars to factory equipment. It also reflects TSMC's dominance of global chip manufacturing.

The scale of TSMC's spending will also "put a ceiling" on ambitious plans from Samsung, TSMC's closest rival in contract chipmaking, and Intel, which has also entered the foundry business, to challenge the Taiwanese company's leadership, said Dylan Patel of Semianalysis.

[...] TSMC has built a massive fabrication plant, or fab, in southern Taiwan for advanced 3 nanometer chips, a technology level at which production is scheduled to begin later this year. It is also building a new fab for production at 5 nanometers, the most advanced technology level currently in production, in the US.

The company said the expansion was needed because demand for its chips would continue to increase by double-digit margins for years to come, even though some analysts have predicted a slowdown after a growth spurt in the past two years.

"We observe end-market demand may slow down in terms of units, but silicon content is increasing," said CC Wei, TSMC's chief executive. "So even if there's a slowdown, we believe it could be less volatile for TSMC. So we expect our capacity to remain very tight throughout 2022."

See also Tom's Hardware and a video at Bloomberg.


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  • (Score: 4, Interesting) by Runaway1956 on Monday January 17, @01:59AM (3 children)

    by Runaway1956 (2926) Subscriber Badge on Monday January 17, @01:59AM (#1213296) Homepage Journal

    The chip shortage may ease, but it isn't going away. Building capacity is always good move, if you've got the resources to build. They'll be prepared for the next big thing, whether is some catastrophe that hobbles the industary again, or a new design that sells billions just as fast as they can be produced. And, if the shortage actually does end next week, or next month, that increased capacity should mean that prices drop a little, benefiting all of us end users. So, my next computers costs $6 less, you might scoff. Hey, a dollar saved is a dollar earned, even if it was TSMC that earned it for me!

    --
    Our first six presidents were educated men. Then, along came a Democrat.
    • (Score: 2) by takyon on Monday January 17, @02:09AM

      by takyon (881) <{takyon} {at} {soylentnews.org}> on Monday January 17, @02:09AM (#1213297) Journal

      TSMC's customers book capacity years in advance in some cases. I don't think they'll have any problem moving wafers. They have increased prices [tomshardware.com] lately, and they can lower them if they want more business.

      The new packaging techniques should increase demand as well. AMD is putting 64 MiB of stacked L3 cache on the 5800X3D. The chip's planar size doesn't increase but more silicon is used.

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    • (Score: 3, Funny) by Anonymous Coward on Monday January 17, @06:40AM (1 child)

      by Anonymous Coward on Monday January 17, @06:40AM (#1213348)

      I always turn to Runaway1956 for inciteful analysis of global technical economic issues. He is kind of the Jim Cramer of the tech world. But this time, I have no idea what he is trying to say!

      • (Score: 1, Flamebait) by Anonymous Coward on Monday January 17, @05:18PM

        by Anonymous Coward on Monday January 17, @05:18PM (#1213419)

        Runaway's aim in posting here on SN nearly a dozen times a day is to saturate this forum with the political message encapsulated in his sig, thereby brainwashing every reader into a subconscious acceptance of its slander as truth. He is fundamentally a political hack.

        Any other value you discover in any of his postings is entirely incidental.

        Whenever his sig promotes a political viewpoint, his every comment should rightly be moderated as flamebait IMHO.

  • (Score: 4, Insightful) by Frosty Piss on Monday January 17, @02:30AM (14 children)

    by Frosty Piss (4971) on Monday January 17, @02:30AM (#1213306)

    Almost certainly they are assuming correctly that China is about to TANK.

    • (Score: 1, Insightful) by Anonymous Coward on Monday January 17, @03:11AM (7 children)

      by Anonymous Coward on Monday January 17, @03:11AM (#1213311)

      But was it smart to build in Taiwan? If China tanks as you predict, I think the chances of aggression toward Taiwan increase--if nothing else as a smoke screen to divert attention away from domestic problems on the mainland.

      • (Score: 2) by DannyB on Monday January 17, @05:39PM (6 children)

        by DannyB (5839) Subscriber Badge on Monday January 17, @05:39PM (#1213425) Journal

        China might want the economic benefits of "owning" TSMC because they regard Taiwan as part of China.

        TSMC may have seen the writing on the wall and is therefore building chip fab capacity in sovereign nations such as Japan and Texas.

        --
        Difference between inlaws and outlaws: outlaws are wanted.
        • (Score: 0) by Anonymous Coward on Monday January 17, @06:39PM (5 children)

          by Anonymous Coward on Monday January 17, @06:39PM (#1213438)

          > sovereign nations such as Japan and Texas.

          Texas a sovereign nations, eh? I hope that was a joke!

          • (Score: 3, Interesting) by DannyB on Monday January 17, @07:01PM (4 children)

            by DannyB (5839) Subscriber Badge on Monday January 17, @07:01PM (#1213443) Journal

            It was. However at least one Texas politician is running on a platform of ceding from the union. I'm not sure, but I think ceding from the union is maybe a permanent thing in Texas. Someone with more information might be able to clarify.

            --
            Difference between inlaws and outlaws: outlaws are wanted.
            • (Score: 0) by Anonymous Coward on Monday January 17, @08:21PM

              by Anonymous Coward on Monday January 17, @08:21PM (#1213461)

              I have already seceded from the union. No politicians required. Yee haw!!

            • (Score: 1, Informative) by Anonymous Coward on Monday January 17, @11:12PM

              by Anonymous Coward on Monday January 17, @11:12PM (#1213490)

              > I'm not sure, but I think ceding from the union is maybe a permanent thing in Texas.

              OK, joke taken. I've been in Texas a number of times, don't recall hearing that, but it does seem possible.

              However, note that George Washington wrote about this potential problem with the Union:
                  https://www.mountvernon.org/library/digitalhistory/digital-encyclopedia/article/george-washington-s-farewell-address/ [mountvernon.org]
              (Original address is available, link is down a page, a blue box on the right side. Warning, the language is flowery or perhaps "formal" for lack of a better term.)

            • (Score: 2) by Freeman on Tuesday January 18, @08:26PM (1 child)

              by Freeman (732) on Tuesday January 18, @08:26PM (#1213658) Journal

              Theoretically seceding from the union is something that Texas could have done. Doing so now, would be rather dumb.

              #1 Texas Residents would need to want to do so. While there are a few out spoken people, it's not that big a thing.

              #2 The United States of America would do a lot to keep Texas in the Union. Very well could be the cause of Civil War #2.

              #3 The legality is pretty iffy. While the Texas Constitution may allow for it. The United States Constitution does not.

              --
              Forced Microsoft Account for Windows Login → Switch to Linux.
              • (Score: 2) by DannyB on Wednesday January 19, @02:40PM

                by DannyB (5839) Subscriber Badge on Wednesday January 19, @02:40PM (#1213843) Journal

                Doing so now, would be rather dumb.

                This item belongs on the list of reasons why they WOULD do it, not on the list of reasons why they wouldn't.

                --
                Difference between inlaws and outlaws: outlaws are wanted.
    • (Score: 2, Interesting) by Anonymous Coward on Monday January 17, @03:59AM (5 children)

      by Anonymous Coward on Monday January 17, @03:59AM (#1213320)

      Financial Times seems to think that China has already tanked, just doesn't want to admit it yet?
      https://www.ft.com/content/13476bf7-a519-427c-afd8-06e5579539d8 [ft.com] or try this
      https://archive.is/DRXa9 [archive.is] if you hit a paywall.

      The article starts by discussing a county (small region south of Beijing) called on the mat by the central government--because the county shook down all their local businesses to fund the county debt. Then it discusses the problems when 30% of the China GNP is tied to real estate development. And ends up with this house of cards that is collapsing in the wake of Evergrande's bankruptcy:

      In China developers often force their suppliers to accept commercial paper in lieu of cash payments, which they promise to make good on by a future date. The supplier can also use the commercial paper for its own payments, provided it endorses it by stamping a company chop on the back of the document. But if Evergrande fails to pay the eventual holder of the paper when it comes due, the holder can sue Evergrande and every other company that endorsed it — potentially freezing assets worth many times more than the original debt.
      In an open letter to Evergrande, the owner of an architecture firm in eastern Shandong province described the “devastating blow” the developer’s default was dealing to companies like his that had endorsed its commercial paper.
      “A Rmb10m commercial paper will often be endorsed ten times before it ends up with the final holder,” Li Menghe wrote. “The holder can then freeze Rmb10m at each of the ten endorsers, [or] Rmb100m in total . . . Most of the endorsers are construction firms and, because of Covid, need liquidity more than ever. Evergrande’s failure to repay commercial paper is pushing countless companies to the edge of bankruptcy.” Li and his firm, Qingdao Wanhe Construction and Decoration Group, did not respond to requests for further comment.

      • (Score: 2) by legont on Monday January 17, @05:51AM (4 children)

        by legont (4179) on Monday January 17, @05:51AM (#1213335)

        It's a very interesting article you brought up, thank you. It appears that private companies in China are simply printing money. If it is indeed the case and not well regulated, the consequences could be huge.

        --
        "Wealth is the relentless enemy of understanding" - John Kenneth Galbraith.
        • (Score: 5, Insightful) by MIRV888 on Monday January 17, @08:10AM (3 children)

          by MIRV888 (11376) on Monday January 17, @08:10AM (#1213355)

          Are you all watching a different China than I am?
          Because the one I'm watching has ripped off every piece of modern military equipment.
          The one I'm watching has penetrated all of our manufacturing and production processes and designs.
          The one I'm watching has us by the balls because they make all our consumer goods.
          Oh... and the one I'm watching keeps practicing invading Taiwan.

          'accept commercial paper in lieu of cash payments' I believe those are called loans.

          • (Score: 1, Insightful) by Anonymous Coward on Monday January 17, @01:02PM

            by Anonymous Coward on Monday January 17, @01:02PM (#1213377)

            > I believe those are called loans.

            Yes, loans, sort of. But these loans don't require a bank or other third party (which would, at least in theory) vet the credit of the borrower.

            As another comment points out, when you can add your chop block (similar to "signature") to the back of a loan document and use it to pay a bill, that is a lot like printing money.

          • (Score: 1, Insightful) by Anonymous Coward on Monday January 17, @05:47PM (1 child)

            by Anonymous Coward on Monday January 17, @05:47PM (#1213426)

            > The one I'm watching has penetrated all of our manufacturing and production processes and designs.

            Um, we (USA) gave a lot of that to the Chinese. We didn't have to move production there and accept their local-ownership rules. But the temptation of low wages and low cost manufacturing was too much for our MBAs to resist. A few companies caught on early, they noticed that as soon as a production line was set up in China, somehow, amazingly <sarcasm> identical knock-offs of the brand appeared. So the smart ones chose to keep their good stuff, the high-end high quality items, made in N. America. I know a couple of companies like this (no idea how many overall, sorry).

            > The one I'm watching has us by the balls because they make all our consumer goods.

            And because the Chinese factories are all making things for us (USA mostly), they are dependent on us for payment. If the USA stops ordering stuff from China, a lot of Chinese companies will fail. Eventually those companies might find markets for all their output within China and other parts of the world, but that will take years--to bring the standard of living up to that level.

            • (Score: -1, Spam) by Anonymous Coward on Monday January 17, @08:23PM

              by Anonymous Coward on Monday January 17, @08:23PM (#1213462)

              not "we", but the Jews and Suited Whore race traitors.

  • (Score: 2) by SunTzuWarmaster on Tuesday January 18, @08:53PM (1 child)

    by SunTzuWarmaster (3971) on Tuesday January 18, @08:53PM (#1213665)
    Chip Demand will Ease? Let's keep it real - anyone who looks at the world and says "the future is going to have less computers" is ***phenomenally stupid***.
    • (Score: 2) by takyon on Tuesday January 18, @09:06PM

      by takyon (881) <{takyon} {at} {soylentnews.org}> on Tuesday January 18, @09:06PM (#1213671) Journal

      Chromebook demand is plummeting as the pandemic eases [arstechnica.com]

      Demand can and will "ease" for certain segments at certain times. You can also find trends like smartphone life cycle slowly increasing (performance and spec increases aren't as significant as they were a decade ago, and they may be breaking less).

      Fab capacity will go up with the construction of new fabs, especially when older fabs continue to be used instead of being upgraded to the new nodes. When these companies are routinely investing $100 billion or more in fab capacity, it is entirely possible that they will end up building "too much", leading to price drops.

      You could expect demand to explode if there is a real push to go 100% driverless in the next 10-20 years, followed by a plummet as the driverless car market is saturated and less accidents happen.

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  • (Score: 2) by darkfeline on Wednesday January 19, @09:03AM

    by darkfeline (1030) on Wednesday January 19, @09:03AM (#1213812) Homepage

    Those dullards need to get their heads out of their nostrils. Everyone is starving for chips even with the economic downturn. Demand is only going to the moon when the economy improves. And if it doesn't, the only investment that's going to save you is hardcore prepping, since you can't eat cash.

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