TSMC to raise R&D spending by 15% in 2017

Taipei--Taiwan Semiconductor Manufacturing Co. (TSMC, ???), the world's largest contract chip maker, said on Thursday that it will increase research and development spending in 2017 in a bid to strengthen its lead over competitors in high-end production process development.

At the company's annual supply chain management forum, Mark Liu (???), TSMC's president and co-chief executive officer, said the chip maker will spend US$10 billion in capital expenditure (capex) in 2017, up from about US$9.5 billion in 2016.

Based on the higher capex estimate for 2017, TSMC's R&D spending will rise by about 15 percent from a year earlier with the aim of accelerating advanced technology development. However, Liu did not provide any concrete R&D numbers at the forum, which was attended by about 600 TSMC suppliers from around the world.

Liu said that the higher R&D spending will focus on the 7 nanometer process which is expected to start trial production in the first quarter of this year and launch mass production in 2018.

In addition to the 7nm process, Liu said, TSMC will also seek to develop technology for the more advanced 5nm process this year, with trial production expected to begin in the first half of 2019.

In addition, TSMC is also beginning preliminary research into 3nm processes by assigning hundreds of engineers to related tasks.

The Taiwanese chip maker started mass production of chips made on the 10nm process in the fourth quarter of last year. Liu said that the company has more than 3,000 engineers and about 500 workers on production lines for the development of 10nm technology, in preparation for shipments chips on the 10nm process scheduled for the first quarter.

The local media has reported that TSMC received orders from China-based integrated circuit designer HiSilicon Technologies Co. (??) and Taiwan's IC designer MediaTek Inc. (???) for chips made using the 10nm process.

TSMC has said it expects the 10nm process to contribute to the company's sales in the current quarter. Liu told TSMC's suppliers that the global semiconductor business is expected to continue to benefit from the development of mobile communications, automotive applications, the Internet of Things and high-power computing.

Liu urged suppliers to work with TSMC on product development and improving energy efficiency.

TSMC, which accounts for more than 50 percent of the global pure wafer business, has been keen to improve its technology to compete with rivals such as U.S-based giant Intel Corp. and South Korea's Samsung Electronics Co.

In 2016, TSMC posted NT$947.94 billion (US$30.83 billion) in consolidated sales, with net profit reaching NT$334.25 billion, both of which represented new records for the company.

Source: Focus Taiwan News Channel