World's biggest contract chip maker to raise $9-billion for expansion - TechCentral

World’s biggest contract chip maker to raise $9-billion for expansion

Image: Tyrone Siu, Reuters

Taiwan Semiconductor Manufacturing Co (TSMC) said on Tuesday it would raise nearly US$9-billion from the debt markets to help fund expansion and spend around $178-million to open a Japanese material research subsidiary.

The world’s top contract chip maker last month posted its best-ever quarterly profit and hiked revenue and capital spending estimates to record levels as it forecast “multiple years of growth opportunities”.

Taiwan’s tech firms have benefited from soaring demand for chips that go into laptops, tablets, smartphones and other products to support the work and study at home boom around the world during the Covid-19 pandemic. They are working hard, too, to address a shortage of chips for car makers.

In a statement after a board meeting, the company said the board had approved the issuance of unsecured corporate bonds domestically not exceeding T$120-billion ($4.3-billion).

It also approved the provision of a guarantee to wholly owned subsidiary TSMC Global for its issuance of US dollar-denominated senior unsecured corporate bonds not to exceed $4.5-billion.

The money raised would “finance TSMC’s capacity expansion and/or pollution prevention-related expenditures”, it said, without elaborating.

60% higher

The company said in January it expected to raise capital spending on the production and development of advanced chips to $25-billion to $28-billion this year, as much as 60% higher than the amount it spent in 2020.

In its statement on the board meeting, it said the board had approved capital appropriations of about $11.8-billion for fab construction, installation and upgrade of advanced technology capacity and “second quarter 2021 R&D capital investments and sustaining capital expenditures”.

TSMC also said the board had approved the establishment of a wholly owned Japanese subsidiary in Japan to expand 3D integrated circuit (3DIC) material research, with a paid-in capital of not more than $178-million.  — Reported by Ben Blanchard, (c) 2021 Reuters

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