Chipmaker TSMC to boost capex to $10B - Mobile World Live

Chipmaker TSMC to boost capex to $10B

15 JAN 2016

Taiwan Semiconductor Manufacturing Co (TSMC) plans to boost capex this year to as much as $10 billion, or by 23 per cent, to keep its competitive edge, after posting a record annual profit last year.

TSMC, which supplies chips for Apple’s iPhone 6 and many others, spent $8.1 billion last year on capex, the Taipei Times said. Its net profit last year increased 16 per cent to TWD306.57 billion ($9.2 billion).

It said about 70 per cent of the capex would be used to expand its next-gen 10-nanometer capacity, while 5 per cent will go to its new 16nm production line in China.

Despite intensifying competition in the 10nm space, TSMC chairman Morris Chang said its intends to begin with a high market share and “we intend not to lose it,” the Times reported.

The company, which fell behind rival Samsung in 16nm production, expects rising demand to help expand its 16nm foundry market share to more than 70 per cent this year from 50 per cent last year.

Chang said its operating profit and revenue will grow 5-10 per cent this year, despite the global semiconductor industry forecast to expand just 2 per cent. In the short term, TSMC expects revenue to fall slightly (1-3 per cent) for a second straight quarter in Q1 as smartphone demand slows and inventories expanded in Q4.

DigiTimes reported earlier in the week that orders for iPhone components are expected to decline 10-30 per cent this quarter.

Co-chief executive officer Mark Liu forecasts growth to pick up next quarter after its Q4 net profit fell 3.3 per cent to TWD72.84 billion, the Taipei Times said.

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Joseph Waring

Joseph Waring joins Mobile World Live as the Asia editor for its new Asia channel. Before joining the GSMA, Joseph was group editor for Telecom Asia for more than ten years. In addition to writing features, news and blogs, he...

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