TSMC Allegedly Planning Massive 5nm Chip Expansion After Record 2020 Earnings

TSMC Wafer
Many people are bidding a not-so-fond 'good riddance' to 2020 as we settle into whatever 2021 brings us, but it was not all bad. That is especially true for Taiwan Semiconductor Manufacturing Company (TSMC). The chip maker apparently pulled in record revenue last month, ending the year with a bang. As a result, it is making a major investment in 5-nanometer chip production for 2021.

TSMC has not yet officially announced its earnings for December. Looking at November, however, the company posted consolidated revenues of NT$124.87 billion (around $4.5 billion in US currency). That represents a 4.7 percent increase from the previous month, and a 15.7 percent year-over-year increase.

The numbers are even better when comparing the January-to-November 2020 time frame. TSMC raked in more than NT$1.2 trillion (~$43.5 billion), which is representative of a 26.4 percent year-over-year gain. Not too shabby.

Having done so well, Taipei media outlet United News claims TSMC will bolster its capital expenditure this year to $22 billion. That is also a new high for TSMC—it's 30 percent higher than TSMC's capital expenditure in 2020, and 10 percent higher than what analysts had been predicting.

Citing supply chain sources, the outlet says TSMC will be investing heavily in 5nm output, and 3nm equipment. At present, it is estimated that TSMC is kicking out 60,000 chips built on a 5nm process per month, and expects to almost double that output to 100,000 chips in the second half of this year.

This is no surprise, given the massive demand for 5nm chips. Related to that, it was reported last month that Apple had hogged TSMC's entire 5nm fab capacity for its iPhone and Mac lines. Whether that is true or not, you can bet that Apple's order of 5nm silicon is a very large one.

Meanwhile, AMD's latest official CPU roadmap confirms that its forthcoming Zen 4 architecture will leverage 5nm manufacturing. Given the current situation with AMD's 7nm Ryzen 5000 series CPUs (they're in short supply), it stands to reason that TSMC would invest so heavily in 5nm production.
Tags:  TSMC, (nyse:tsm), 5nm