TSMC has already said that it will build a 3nm wafer fab at its Tainan campus in southern Taiwan ending speculation that the company could locate it in the United States or elsewhere outside Taiwan.
However, the cost to build and equip such a wafer fab, which may make integrated circuits with processes and equipment not yet invented can only be afforded by very few entities such as Samsung, TSMC and possibly companies with Chinese backing.
“By the time we’re through, by the time we’ve built all the necessary capacity, I think we would have spent upwards of $15 billion,” Chang said in an interview with Bloomberg conducted shortly after he had announced his plan to retire in June 2018 (see TSMC’s Morris Chang sets retirement date). “That’s a conservative estimate. Maybe it’s safer to say upwards of $20 billion.”
TSMC typically spends about $10 billion a year on capital expenditure but Chang said that may have to be increased to $11 billion to keep up with the capital intensity of staying at the leading edge. He also said that the desire of Chinese companies to build capacity to gain market share could product an oversupply.
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