TSMC's Capex to Hit All-Time High in 2015

Taiwan Semiconductor Manufacturing Co. (TSMC) plans to spend over US$10 billion in 2015 on advanced process technology projects to outdo Intel Corp., marking its all time high capital expenditure after budgeting US$9.5 billion for 2014.

The silicon foundry will mostly use the money to boost its 16nm process capacity as well as develop and prepare 10nm process technology for pilot production in late 2015 and volume production in late 2016.

TSMC plans to put 16nm process into volume production late in Q2, 2015, a quarter earlier than  planned. The company's president and co-chief executive officer (CEO), C.C. Wei, predicts its  revenue from foundry service using 16nm process to rise to high end single-digit percentages.

The company uses 16nm process to make Apple's A9 processors for mobile devices to suggest its 16nm process has exceeded Samsung's.

Nevertheless, TSMC will mostly use the 2015 expenditure on the development of 10nm process technology that it has used on chip designs for at least 10 customers in handset baseband graphics chip, server, game console, and field programmable gateway array (FPGA).

With impressive spending this and next year, TSMC, spokesperson Lora Ho said its revenue will continue to grow at double digit rate in 2015 and 2016, with the company estimating revenue to surge at all time high rate of 27% year on year in 2014, compared with 2013's annual rate of 18%.

Capital-equipment suppliers including Applied Materials Inc., United Integrated Services Co., Ltd., and Murata Machinery, Ltd. are profiting from such capital expenditures. (KL)