Taiwan Semiconductor Manufacturing Company (TSMC) has revised upward its capex target for 2010 to US$5.9 billion, emerging as the world's second-largest semiconductor industry capital spender trailing only Samsung Electronics. TSMC has also raised its forecast for chip market growth for the year.
Speaking at a company investors conference, chairman and CEO Morris Chang said TSMC plans to allocate US$5.8 billion in capex for its foundry business, and another US$100 million for new businesses such as solar energy and LED. Total capex for 2010 is estimated at US$5.9 billion, compared to US$4.8 billion that was previously set.
About 79% of the US$5.8 billion will be used to expand TSMC's 65/40/28nm technology capacity, 13% for mainstream processes and the remainder for equipment and R&D expenses, Chang said. The planned capex will be mainly focused on expanding 12-inch capacity, Chang added.
TSMC recently broke ground for the construction of its third 12-inch fab, Fab 15. It is also set to complete Phase 5 expansion at Fab 12, and Phase 4 at Fab 14.
Chang claimed that TSMC does not build capacity on speculation, but to meet the needs of its customers. Chang said he believes TSMC's customers are giving their 'honest' demand forecasts.
Chang said TSMC now projects the foundry and overall semiconductor sectors in 2010 will grow 30% and 40%, respectively, compared to 22% and 36% growths that were previously estimated.
TSMC reported net profits of NT$40.28 billion (US$1.27) for the second quarter of 2010, an all-time high. Consolidated revenues for the quarter were NT$104.96 billion, also scoring the company's highest quarterly level.
"Both macroeconomic forecast and booking trend indicate that third-quarter business will continue to grow. Relative to the second quarter, the consumer and communication segments in the third quarter will increase while the computer segment will decline slightly," said TSMC CFO Lora Ho.
TSMC expects consolidated revenues for the third quarter to be NT$109-111 billion, a 4-6% rise from the prior quarter's level. Its gross margin and operating margin are estimated at 48-50% and 36-38%, respectively, compared to 49.5% and 38.6% in the second quarter.