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TSMC Earmarking $60+ Billion To Fix Chip Shortage

Taiwan Semiconductor Manufacturing Co. has released a record spending roadmap that will see the leading chipmaker spending north of A$60 billion in 2022 alone, in order to mend the ongoing chip shortages that have crippled the industry.

TSMC is projecting average sales growth of 15-20 per cent annually, doubling its initial expectations. The $60 billion is earmarked to increase, upgrade, and expand its chipmaking capacity during the year.

For comparisons sake, Intel is also planning major production expansions, but has only allocated between A$34.3-38.4 billion to the cause.

TSMC reported a 16 per cent profit leap for its December quarter, with sales reaching $21.7 billion during the period.

Chairman Mark Liu told analysts on a conference call that “the semiconductor industry growth will continue to be fuelled by the structural mega trends of 5G and high-performance computing.”

“TSMC’s capex plan for 2022 of up to $44 billion looks set to enable it to capture high growth in leading and specialty technology nodes and support its percentage sales-growth target of 15-20 per cent CAGR,” Bloomberg Intelligence says of the plan.

“Its net cash position of $12 billion, coupled with consistent operating cash flow, appear likely to support its sizable capacity-expansion plan while maintaining its dividend payout. The company has the capacity to take on more debt without hurting its financial metrics significantly.”

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