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

The China Post

By Christine Chou — Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電), the world’s largest contract chipmaker, said it would spend 15 percent more on research and development this year, as the 7-nanometer (nm) wafer is scheduled to undergo risk production in the first quarter and begin mass producing by 2018.

According to local media, TSMC held a forum this afternoon for 600 representatives from its raw material suppliers and partners around the world.

The firm’s CEO and co-chairman Mark Liu (劉德音) said at the forum that TSMC was confident that Moore’s Law would continue to hold, adding that the world was heading toward a world in which “computer power is everywhere,” providing new opportunities for semiconductors used for mobile, automobiles, the internet of things or high performance computing.

Though there many interpretations of Moore’s Law, it is commonly understood as a prediction that the computing power packed into a single chip would double every two years.

Faster, smaller and more power-efficient chips have helped PC makers continuously shrink laptops and smartphones while adding longer battery life. Liu said TSMC’s capital expenditure would reach US$10 billion this year, and that costs invested in R&D was expected to increase as well — growing 15 percent compared to last year’s expenses. Regarding the foundry’s 10-nm chip production, Liu said they started mass producing 10-nm chips last year and currently there were more than 3,000 engineers and 500 operations staff working to prepare shipments in the first quarter.

The number of 10-nm shipments is expected to rapidly increase by the second half of this year, Liu said. Liu said TSMC would start testing chips made on the 7-nm process this quarter and ramp up production in 2018.

Also, he said the 5-nm chips were currently under development andwere expected to reach risk production in the first half of 2019. There are “hundreds of engineers” doing early-stage research on the advanced 3-nm chip manufacturing process, Liu said. TSMC is reportedly searching for suitable locations to build a new factory to produce 3-nm chips. According to advisory firm IC Insights, TSMC was the sixth largest spender in R&D in the global integrated circuit business last year.

The report said TSMC holds more than a 50 percent share of the world’s pure wafer business, spending approximately US$2.22 billion in R&D in 2016.