TSMC Cancels Chip Price Cuts, Promises $100 Billion Investment Surge
Taiwan Semiconductor Manufacturing Co. (TSMC) is asking clients to accept higher prices as it ramps up investment to deal with a "structural and fundamental increase" in chip demand. Nikkei Asia reports: C.C. Wei, TSMC's CEO, told clients in a letter seen by Nikkei Asia that the world's biggest contract chipmaker plans to invest $100 billion over the three years through 2023 in advanced semiconductor technologies, according to the letter. TSMC this year announced record high capital expenditure of up to $28 billion for this year alone. "We are seeing a structural and fundamental increase in underlying demand driven by key long-term growth megatrends including 5G and high-performance computing," Wei said in the letter. The Covid-19 pandemic has also transformed the global economy, changing how people work, learn and live, the CEO added. Wei told clients that TSMC will also "suspend wafer price reductions starting December 31" this year, for four quarters. "We believe that this modest action is the least disruptive option to supply chains so that TSMC can deliver our mission of providing leading semiconductor technologies and manufacturing capability to you in a sustainable manner," Wei said. "The increased capacity will improve supply certainty and help protect complex global supply chains that rely on semiconductors," he said. "We ask for your patience as we expedite the building of new fabs and capacity."
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