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Taiwan TSMC's capex forecast to hit high in Q4: advisory firm

(CNA photo)

(CNA photo)

On the back of the need for high-end technology development, Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chipmaker, is expected to achieve a quarterly high in capital expenditure in the fourth quarter, according to U.S.-based market information advisory firm IC Insights.

In a report released overnight, IC Insights said TSMC is expected to raise its capex by 64 percent from the third quarter's US$3.148 billion to US$5.147 billion in the fourth quarter, the highest quarterly level in the company's history.

The anticipated capex for the fourth quarter will exceed TSMC's previous record of US$3.799 billion recorded in the first quarter of 2014 by 36 percent, IC Insights said.

"TSMC is the only pure-play foundry to offer leading edge technology and is seeing very strong demand for its 7-nanometer process, which is expected to represent 33 percent of the company's sales in the fourth quarter of 2019," IC Insights said in the report.

"Most of its current investment will be aimed at adding capacity for its 7nm and 5nm technologies," IC Insights said.

The forecast echoed an announcement released by TSMC in an investor conference held in mid-October, when the chipmaker said it had raised its capex for 2019 to a range between US$14 billion and US$15 billion.

The 2019 capex planned by TSMC will be the highest in the company's history.

According to IC Insights, TSMC's capex stood at US$2.464 billion and US$3.741 billion in the first and second quarters, respectively, and put the figure for the entire 2019 at US$14.5 billion, in line with TSMC's plan.

As for Samsung Electronics Co. of South Korea, a rival of TSMC, IC Insights said that its capex for the fourth quarter is expected to hit US$7.9 billion in the fourth quarter, up 81 percent from a quarter earlier.

IC Insights said Samsung's anticipated significant capex growth is aimed at building infrastructure for memory chip production, a move that is expected to meet mid- to long-term demand.

IC Insights said Samsung's capex for 2019 is expected to hit US$19.9 billion, down 8 percent from a year earlier.

During the 2017-2019 period, Samsung's aggregate capex is expected to hit US$65.8 billion, about 53 percent higher than the anticipated spending by U.S.-based semiconductor giant Intel Corp., IC Insights said.

The advisory firm said Samsung's aggregate capex in the three years will be more than double the US$30.8 billion to be spent by all indigenous Chinese semiconductor suppliers in combination.

Samsung's capex showed the company's ambitions to maintain its lead in the global semiconductor industry, the advisory firm said.

In 2019, the top five semiconductor manufacturers in the world -- Samsung, Intel, TSMC, South Korean memory chipmaker SK Hynix Inc. and American memory chipmaker Micron Technology Inc. -- are expected to account for 68 percent of the total capex of the global semiconductor industry, a ratio that will represent a record high.

Updated : 2022-05-17 10:34 GMT+08:00