TSMC pledges $100 billion investment as chip wars intensify

Taiwanese chip manufacturer TSMC reckons semiconductor demand is only going to increase in the coming year and it’s determined to meet it.

No sooner does Intel announce a move into the foundry game with a $20 billion investment than TSMC seems to say ‘I’ll see your 20 and raise it 80’. Reuters seems to have broken the story, having got official notification from TSMC, which didn’t consider such a major announcement to be worthy of a press release.

“We are entering a period of higher growth as the multiyear megatrends of 5G and high-performance computing are expected to fuel strong demand for our semiconductor technologies in the next several years,” TSMC said in a statement to Reuters. “In addition, the COVID-19 pandemic also accelerates digitalization in every aspect.”

That seems like a fairly safe bet and this year has shown how dependent the world now is on chips, with the automotive industry heavily hit by a shortage. The announcement also plays into the geopolitical narrative, in which 5G and semiconductors have become central to the battle of wills between the US and China.

Not only is TSMC of critical importance given its pre-eminence in the latest manufacturing nodes, it’s also based just of the coast on China in a country China thinks it owns. So it will be interesting to see where the extra capacity created by this massive investment will be situated and it wouldn’t be surprising to see a chunk of it end up in the US and Western Europe.