TSMC’s Massive Investment Plan Gives Samsung Electronics Plenty to Ponder on

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2021/01/18 01:19:03 (permalink)
TSMC’s Massive Investment Plan Gives Samsung Electronics Plenty to Ponder on - Businesskorea
Taiwan's TSMC, the world's No. 1 foundry company, has come up with a 30-trillion-won facility investment plan for 2021. This will give Samsung Electronics, which is closely trailing TSMC, plenty to ponder on.  TSMC announced on Jan. 14 that its facility investment will reach US$25 billion to US$28 billion this year. The figure is up more than 60 percent from US$17.2 billion in 2020. This exceeds the estimates of US$19 billion to US$20 billion for 2021 offered by semiconductor experts.
"It is an investment to seize opportunities for growth over the next few years," TSMC said, raising its average annual profit growth target to 10 to 15 percent from 5 to 10 percent in its previous forecast. The company's net profit in the fourth quarter of 2020 climbed 23 percent on year to US$5.1 billion.
Industry watchers say that TSMC’s major customers, including Apple, AMD, NVIDIA and Qualcomm, placed significantly increased orders for 5-nm or sub-5-nm products, leading the foundry to make huge investment in facilities to meet them. TSMC announced that it will use 80 percent of its facility investment for 2021 for 3-nm, 5-nm and 70-nm micro-fabrication processes.
In particular, some industry insiders say that TSMC’s 2021 investment plan takes into account the expected outsourcing deals with Intel. Reuters recently reported that Intel is planning to make graphic processing unit (GPU) DG2 to compete with Nvidia, with TSMC expected to produce the chip using its 7-nm process. Intel had agonized over which company to choose between TSMC and Samsung Electronics for the production of the GPU and appears to have finally chosen TSMC.
Samsung Electronics, the second-largest foundry company, is also expected to expand its investment in system semiconductors in 2021 with the goal of standing first in the system semiconductor business in 2030. Stock analysts expect Samsung Electronics to invest 12 trillion won in non-memory facilities in 2021, twice as much as its investment in 2020.
TSMC is investing heavily in my opinion on its production facilities to assure it stays in the number 1 position. I personally think Samsung will need to invest more if they wish to be number 1. 

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