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TSMC Cancels Chip Price Cuts, Promises $100 Billion Investment Surge (nikkei.com) 50

Posted by BeauHD from the supply-and-demand dept.
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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TSMC Cancels Chip Price Cuts, Promises $100 Billion Investment Surge More

TSMC Cancels Chip Price Cuts, Promises $100 Billion Investment Surge

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  • China (Score:5, Insightful)

    by AlexHilbertRyan ( 7255798 ) on Thursday April 01, 2021 @06:50PM (#61226420)
    How long until China takes Taiwan because of TMSC.

    • Re: (Score:2)

      by Z80a ( 971949 )

      They can actually do it without TSMC and tencent basically buying the chinese army?

    • Or, how long until China takes TSMC, because it's part of their scheduled plan to take Taiwan? I don't think what China is doing to Hong Kong is because they want ownership of the businesses located there, but rather because they want all of the people on Hong Kong island and the Kowloon peninsula to be as controlled by the Chinese mainland government as the people in mainland China. They want the same thing for the people on the island of Taiwan.
      • It would be trivial to sabotage the plants, and short of that do you really think they wouldn't explosively disassemble them?
        • I'm sure TSMC could pay people to destroy what they own. If they're building new fabs, it might be nicer for the workers to build them where that doesn't become necessary.

      • Re:China (Score:4, Interesting)

        by AlexHilbertRyan ( 7255798 ) on Thursday April 01, 2021 @08:32PM (#61226694)
        No you have it completely wrong, the reason for what is happening in HK is so the rest of china doesnt get ideas about wanting their own freedoms.
        • That's a follow-on result to controlling everyone there. Additionally, whether the rest of China thinks about it or not, the government on the mainland is happier knowing that all interaction between people in HK and people in the rest of the world is restricted to what is permitted by that government - no toehold for the people who fought China in the opium wars.

        • +1

        • Yeah people in Hong Kong have the freedom to pay sky high rents, and be poor. Capitalism wow.
    • Probably never. The chances of them taking the island by force and recovering those facilities is nearly zero. And they know it. For starters, the people's skills and knowledge is nearly as important as the high-end equipment. Taking the gear without having the people in place to use it won't net all that much. Without the right maintenance and upkeep, ultra-sophisticated facilities like that decay pretty damn quickly. They probably wouldn't be worth much. Second, I'm fairly sure the Taiwan government woul
      • > I suspect that a few cruise missles from Guam would mysteriously do the job for them.
        Yeh im sure americans will dare fire on chinese forces, especially when the chinese have nukes.

        > Probably never. The chances of them taking the island by force and recovering those facilities is nearly zero. And they know it.

        And thats the point, if the chinese gov build their own, they might want to deny the facility for its export opportunities.

        • Re: (Score:1)

          by Kokuyo ( 549451 )

          That's a big if seeing as how they've been trying and so far got nothing out of it. It seems to me that chip making doesn't lend itself for the usual Chinese methods of taking over an industry.

      • > The world can be a nasty place. The west has been playing nice with China for the past several decades, but that's obviously over. Let's see how well they do when they're NOT getting preferential treatment.
        Thas because a lot of greedy traitors in the USA have helped build up china . You used the wrong words.
        • Eh. The decision to be nice to China was made strategically in order to try to guide them down a path DIFFERENT than the USSR. Yeah, it didn't work out, but it might have.

          It's something that was supported by both parties for a long, long time. Started by Republicans (Nixon), supported by Democrats, back and forth for several decades. Not a plot by a bunch of secret-commies. If it had worked, we would have gone down in history as having helped to form the worlds largest democracy. A worthwhile risk that
          • > The decision to be nice to China was made strategically in order to try to guide them down a path DIFFERENT than the USSR. Yeah, it didn't work out, but it might have.
            No moving factories, expertise and sharing knowledge and builiding up the way it has turne dout was pure and the act of traitors motivated only by pure greed.
            Nixon is one thing, the fact all those companies moved operations is completely separate, they moved manuf there because they wanted too. Nixon and later admins didnt force them

          • The decision to be nice to China was made strategically in order to try to guide them down a path DIFFERENT than the USSR. Yeah, it didn't work out, but it might have.

            No, it mightn't. And it wasn't going to because of their government. And this was obvious long, long ago, and has remained consistently obvious. All we have been doing is funding slavery.

          • Wow, nice fairy tale story ass-hole.

            It's all about trade and controlling cost. Multi national corporations wanted to setup shop in China. So the they setup shop in China. It's all about capitalism.

            • Wow, nice fairy tale story ass-hole.

              It's all about trade and controlling cost. Multi national corporations wanted to setup shop in China. So the they setup shop in China. It's all about capitalism.

              US foreign policy revolves around such fairy tales. It has since the end of WWII. It was a grand success for the public relations boys for 55 years. It started to wear a little thin when the Bush administration decided to invade Iraq and needed an excuse, but up until that point, the fairy tales had been holding strong. The US's mercantile wars were a dirty little secret for decades.

              • Why can't it be all these things at once? The world is complicated. A lot of things don't have a simple-minded, 3-word explanation.

                Yes, we wanted to keep our position as the dominant world power.
                Yes, we wanted to maintain our influence in Asia.
                Yes, we wanted to be able to trade with China for our own fun and profit
                Yes, we wanted China on our side instead of supporting the USSR
                Yes, we liked the idea of fostering a new democracy.
                Yes, we liked the idea of helping to pull a billion people out o
      • Comment removed based on user account deletion
      • The biggest thing holding China back from ruling the world is they learned how to be a super power from watching the Americans (the most hated country on earth).
    • India wants Chip industry. Create a little Taiwanese state allow permanent residence, voting, self governance. Then cross settle Indians and others in Taiwan . Outlandish but the $1 billion offers not likely to get much. There r of course more sane alternatives but end of the week so brainstorming but without so much brain.
  • there's shortages, so prices are going up.

    Can we please start treating China manufacturing everything we depend on as the National Security Crisis it actually is. I'm not saying we should get mad at China, I'm saying we shouldn't have all our eggs in anyone's basket. And we most definitely do right now.

    • Re:"Asking" isn't the way I put it (Score:4, Informative)

      by ShanghaiBill ( 739463 ) on Thursday April 01, 2021 @07:29PM (#61226546)

      Can we please start treating China manufacturing everything we depend on as the National Security Crisis it actually is.

      TSMC is not Chinese.

      The "T" stands for Taiwan.

      TSMC has an ancient 200mm fab in Shanghai that has a 200 nm step size.

      All their bleeding edge (10nm or below) fabs are in Taiwan.

      Their new fab in Arizona will be 5 nm.

      • Re:"Asking" isn't the way I put it (Score:5, Funny)

        by ghoul ( 157158 ) on Thursday April 01, 2021 @08:22PM (#61226662)
        Well Arizona may end up in Mexico after the Reconquista. Build it in Kansas if you really want to be safe from all foreigners. What? You can worry about China taking Taiwan back and I cant worry about Mexico taking the Southwest back?

        • Taiwan is the part of China where the Nationalist government resettled after the 1949 Communist Revolution. For many years, the Nationalist government on Taiwan claimed to be the legitimate Chinese government, and western powers reinforced them in that position.

          So there's a more complex history with regard to China/Taiwan than there is with regard to Mexico/Arizona.

          Anyways, if there is a part of the US that Mexico could justly claim, it would be California, which was forcibly taken from Mexico after the Me

          • Re: (Score:2)

            by ghoul ( 157158 )
            Arizona is part of what was called Alta California - the entire Southwest is

        • You can worry about China taking Taiwan back and I cant worry about Mexico taking the Southwest back?

          Mexico's military amounts to a fart in a wool blanket. They can literally be defeated by drug gangs.

          • Re: (Score:2)

            by ghoul ( 157158 )
            That snark would have more value if the drug gangs were not full of ex soldiers. The gangs learned their craft in the military.

      • Re: (Score:2)

        by ddtmm ( 549094 )
        200mm fab? Did they buy that from Intel??
        • That is 6 inch wafers. I also thought they were not widely used anymore. I assume it is an old process for analog or power, like 350nm.

      • TSMC is not Chinese. The "T" stands for Taiwan.

        TIL according to wikipedia: "Taiwan,Officially the Republic of China (ROC)". It is not the "People's Republic of China". I guess both are Chinese?

      • 200mm not nm

        200mm is the wafer size

    • I agree with you, I think this announcement comes at a moment of concern about the loss of domestic production worldwide, including and especially in the US. Biden's infrastructure proposal includes a $50 billion investment in semiconductor manufacturing and research for this precise reason. I could easily see Intel becoming sort of an unofficial public/private sector partnership, in the way that Boeing is, to preserve US aerospace capability.
      • If you want the chip fabs in America then put import duties on foreign chips. Temporary subsidies don't change the corporate balance sheet.
    • So you might want to tell that to Intel, AMD, Google, Microsoft, Apple and all other corporations that moved their supply chain to China and elsewhere in order to keep costs down to make investors happy.

      You seem to think this was a political decision and not a business decision.

  • Now we know why they accepted making chips for Intel, instead of the natural instinct of telling them to fuck off and die.

    Smart of you, Mr. Gold! [youtu.be]

  • So this means chips' prices won't come down in the near future. Now, they're high because the demand greatly outstrips supply. In the near future it will be because they will have to fund the TSMC investments.
    In the long run prices will probably come down.

    • controls over 50% of the market. Why would they reduce their prices if they're the only viable option? Sure, Samsung is nipping at their heels all the time, but a duopoly is usually the same result, and while I have not read anything about Samsung's capabilities, I doubt their capacity is even close.

      The fabless companies (Apple, AMD, Nvidia, etc) can move their business around for the cheapest price - which may eventually force them down, except capacity is stretched the limit right now.

      I saw an article [semiconductors.org] y

      • "This is absolutely a big national security concern."

        To who, corporate America? Corporate America does not give a flying fuck.

        "controls over 50% of the market. Why would they reduce their prices if they're the only viable option?"

        Because they did "reduce their prices" - "Wei told clients that TSMC will also "suspend wafer price reductions starting December 31" this year, for four quarters." The stated reason for ending price reductions was due to investment in increasing chip manufacturing capac
    • The price of chips is set by production yields (the fraction of chips on a chip wafer that actually work). The longer a chip fab runs the higher those yields get, until they upgrade the fab to run at a smaller geometry and yields restart at terrible.

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