TSMC, the chip manufacturer for Apple and AMD, plans on spending a record amount to bolster processor production in 2021.
The Taiwanese semiconductor provider expects to spend between $25 billion and $28 billion on capital expenditures this year, up from the $17.2 billion it invested in 2020.
The increase is stunning since TSMC used to budget only around $11 billion annually on capital expenditures between 2015 and 2019. However, the company’s manufacturing is experiencing a surge in demand from its four main client categories: smartphones, computing, automotive, and the Internet of Things (IoT).
TSMC plans on devoting 80% of the capex funds toward its 3-nanometer, 5nm, and 7nm manufacturing technologies, which are expected to pump out the latest processor designs for Apple and AMD.
Specifically, the 5nm process is already being used to manufacture chips for Apple’s iPhone 12 and ARM-based MacBooks. AMD, on the other hand, has been using TSMC’s 7nm process to produce the latest Ryzen PC chips and processors for Sony’s PlayStation 5 and Microsoft's Xbox Series X.
The news comes as Intel is considering outsourcing some of its production to TSMC. Intel is expected to discuss the matter during its earnings call next week. But on Wednesday, research firm TrendForce claimed Intel has already committed to using TSMC to mass produce upcoming Core i3 processors on the 5nm node and then midrange and high-end CPUs in 2022 using the 3nm node.
At least some of the money from TSMC’s spending increase is going toward a new factory the company is building in Arizona. However, the facility isn’t expected to open until 2024.