TSMC will up capital expenditure by $4B to meet rising demand for 7nm and 5nm chips

onetheycallEric

TS Addict
Staff member

Just after reporting its Q3 2019 earnings, TSMC has announced it will increase capital expenditure for 2019 to $14B -- a $4B increase over previous projections for 2019. TSMC had previously anticipated a 2019 CapEx between $10B and $11B, while the company was also remaining conservative on the outlook for 5nm chips.

However, TSMC has changed course, having anticipated a strong demand for its 7nm-class nodes, as well as its upcoming 5nm node. In particular, TSMC notes that it expects the 5G deployment to be rather aggressive. As such, TSMC outlined plans in an earnings call to not only revise its CapEx spending this year, but that 2020 will also see a similar CapEx spending in order to meet demand.

For 2019, the majority of the $4B increase will go towards outfitting fabs with 5nm capacity, while $1.5B will be allocated for increasing 7nm capacity.

Being that N7+, N6, and N5 will all see extensive use of EUV on an increasing amount of layers, we can infer that the majority of TSMC's spending will account for EUV equipment, presumably from ASML. ASML recently announced its own Q3 2019 earnings, and its sales of EUV lithography equipment have never been higher.

TSMC's advanced technologies, which they define as 16nm and below, accounted for 51% of its wafer revenue in the third quarter. Specifically, TSMC's 7nm-class nodes accounted for 27% of wafer revenue, the most of any node.

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koblongata

TS Addict
Still waiting for AMD's high-end 4K GPUs for my all AMD 4K build.... still waiting for their 7nm mobile APUs for my laptop... and all of a sudden iPhone XI is in great demand...
 

Cycloid Torus

Stone age computing - click on the rock below..
7nm, 5nm.... I wonder what kind of shielding is necessary to survive an electromagnetic storm (let alone a Carrington Event).
 

Adi6293

TS Guru
Still waiting for AMD's high-end 4K GPUs for my all AMD 4K build.... still waiting for their 7nm mobile APUs for my laptop... and all of a sudden iPhone XI is in great demand...
Radeon VII does reasonable well in 4K but at this point you might as well wait for big Navi, I'm going to buy a block my card and see how far I can push it :)