The investment is seen as the Taiwanese firm’s response to address the ongoing global chip shortage
Taiwan Semiconductor Manufacturing (TSMC) said that its board of directors have sanctioned an investment of around $2.88bn for installing mature technology capacity.
The Taiwanese chip manufacturer did not further elaborate on details about the expansion of capacity.
However, its investment is seen as its response to address the ongoing chip shortage across the world that has particularly impacted car makers.
Various automobile manufacturers, which include Ford Motor, General Motors, Toyota Motor, Volkswagen, and Subaru have announced curtailed production at their respective plants due to the shortage of supply of semiconductors.
The shortage of computer chips across the world has been due to multiple factors created by the Covid-19 pandemic, which includes their heightened usage by manufacturers of consumer electronics.
TSMC’s $2.88bn investment was one of the two resolutions passed by the company’s board of directors. The other one is the issuance of no more than 2.6 million common shares of employee restricted stock awards (RSAs) for the current year.
Recently, the company said that it will look to invest $100bn over the next three years to boost the capacity of its chipmaking plants. The company is counted among the main contract chip manufacturers in the world, catering to Apple, Qualcomm, and others.
Earlier this month, TSMC reported revenue of NTD362.41bn ($12.9bn) and a net income of NTD139.69bn ($4.97bn) for the first quarter of 2021. The Q1 2021 revenue had a 16.7% year-over-year (YoY) growth, while the net income had a 19.4% increase YoY.
The management of TSMC further anticipates the capital budget of 2021 to be nearly $30bn.
In February 2021, the company’s board sanctioned investment of nearly $11.8bn for fab construction, installation of fab facility systems, and installation of mature and speciality technology capacity, among others.