TSMC, here's where it could expand its production capacity
TSMC
When Taiwan Semiconductor Manufacturing Co. made plans to build a factory in the United States, it set a rather modest production capacity target of around 20,000 wafers per month (WSPM). Chip makers today tend to build larger factories in an effort to minimize costs per wafer, but according to an unconfirmed report from UDN, the company may be planning several stages of expansion for its Arizona facility.UDN this week reported rumors that TSMC intends to build not one, but "six factories in the Arizona plant area" in an effort to expand the site to the so-called "MegaFab class" facility. TSMC of course has not commented on these alleged plans, furthermore it is quite rare for chip makers to share their strategic plans outside of top management. Based on TSMC's classification, a MegaFab has a capacity of approximately 25,000 WSPMs, so its planned facility in Arizona may already almost be called a MegaFab.
TSMC currently operates six GigaFab - manufacturing facilities with a capacity of 100,000 or more WSPMs - in Taiwan processing 300mm wafers. These facilities have cost approximately $ 20 billion, have to work steadily to be profitable, and are aimed at minimizing costs per wafer. These manufacturing facilities are typically built in multiple stages and, at times, new modules are added to implement innovative technologies. TSMC has several major customers in the United States, including Apple, AMD, Qualcomm, and NVIDIA. To meet their demands, 20,000 WSPMs would not be enough. Therefore, unless TSMC wants to serve only certain government and military contracts in the United States, it will necessarily have to expand its factory in Arizona.
TSMC's current six GigaFabs are located in several locations in Taiwan, so it is highly unlikely that the company plans to build another six GigaFabs in the US anytime soon. On the other hand, it can expand its Arizona factory in stages as demand for its services increases. At this point it is largely speculation. TSMC (and other foundries) only make expansions when it is evident that they are unable to meet customer demand. As the Arizona facility is expected to start operating only in 2024, it is perhaps too early to discuss plans for its magnification.
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TSMC reportedly auctioning off excess wafer capacity, despite backlog of orders
What just happened? We've long heard that semiconductor manufacturers are working through a backlog of orders as they struggle to alleviate worldwide chip shortages, so it seems strange to learn that TSMC has just auctioned off its 'excess' capacity.According to ComputerBase sources (via PC Gamer), TSMC recently auctioned off its excess wafer capacity 'to the highest bidders.' No word on what the excess capacity might be or the bidders' identity, though it's thought to have gone to the automotive industry.
Automakers have suffered more than most during the chip shortages. Many companies have already reduced or said they might reduce their output due to a lack of chips for their vehicles. The situation has led to the Biden administration taking steps to, hopefully, address the problem.
Desperation for manufacturing capacity has driven up TSMC's price. Financial analysis Dan Nystedt tweeted that excess capacity for the 2nd quarter cost the unknown highest bidders a 15% to 20% price premium, which will undoubtedly be welcomed by TSMC.
Covid-19 and the resulting number of people working from home, complex manufacturing processes making chips more difficult to produce, the larger number of chips in every device, logistical problems, package shortages, and the US-China trade war have produced a perfect storm leading to unprecedented chip shortage, and this is despite Wafer producers increasing their output 40 percent in December.
Wafer capacity leadersCompanyMonthly wafer manufacturing capacityTotal global capacity shareSamsung3.1 million14.7%TSMC2.7 million13.1%Micron Technology1.9 million+9.3%SK Hynix~1.85 million9%Kioxia1.6 million7.7%Intel884,000~4.1%The bad news is that the end of the crisis won't arrive anytime soon. Many analysts believe the market won't return to normal until sometime next year, by which time supply should have caught up with demand, and inventories will be replenished.
In other TSMC news, we recently heard that the company is set to produce 3nm chips by year's end with Apple as its partner.
