TSMC's Expansion Plan Depends on Sufficient Power Supply

While declining to voice its position on nuclear power, Taiwan Semiconductor Manufacturing Co. (TSMC), a major pure silicon foundry, says its expansion plan in Taiwan depends on the island's sufficient power supply that is critical to foundry factories.

The company says that although currently power bills account for a low proportion of the company's operational costs, the company has no choice but to accept higher electric rate as long as the supply is stable and sufficient.

Industry executives feel that power shortage would impact TSMC's expansion plan to undermine not only its growth but also recruitment plan, for there is no point in continuing huge investments in capital expenditure and land acquisition, which already account for high percentage of the company's operating costs. Downsizing expansion plan by TSMC will hit the global supply chain of the electronics industry.

This year, the foundry giant will budget US$10 billion for expansion, making it the biggest capital spender in Taiwan's semiconductor industry.

According to industry executives, after becoming the exclusive foundry of Apple A8 processors, TSMC is vigorously boosting leading-edge process capacity to win contracts to build Apple A9 processors. The company has begun since the second quarter accelerating its 16-nanometer and 20-nanometer process capacity project, aiming to boost the output using the two advanced process technologies to 110,000 wafers of chips a month by the end of 2015 to keep leading the industry, according to capital-equipment suppliers. (KL)