TSMC is planning to invest $100 billion over the next three to increase capacity at its chipmaking plants, Reuters reported.
Intel announced plans to invest $20 billion to expand its advanced chip manufacturing capacity in the United States.
Taiwan Semiconductor Manufacturing is the world’s largest contract chip manufacturer with clients including Apple and Qualcomm.
“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,” the company said in a statement to Reuters.
TSMC recently posted its best-ever quarterly profit and hiked revenue and capital spending estimates to record levels as it forecast “multiple years of growth opportunities”.
TSMC expects to lift capital spending on the production and development of advanced chips to between $25 billion-$28 billion this year, as much as 60 percent higher than the amount it spent in 2020.
TSMC also revised up its compound annual growth rate targets for revenue during the 2020 to 2025 period to 10-15 percent from an earlier estimate of 5-10 percent.
Demand for chips has been so high that manufacturers around the world are sounding alarm bells about shortages. Several car makers have seen production plans hit by insufficient supply, leading TSMC to see a jump in demand from automakers in the fourth quarter.
The shortages have several causes, industry executives and analysts say, including bulk-buying by U.S. sanctions-hit Chinese tech giant Huawei Technologies, a fire at a chip plant in Japan, coronavirus lockdowns in Southeast Asia, and a strike in France.
Partly helped by the launch of Apple Inc’s iPhone 12, TSMC’s net profit for the October-December fourth quarter soared 23 percent to T$142.8 billion ($5.1 billion). Revenue jumped 22 percent to $12.68 billion in the fourth quarter.
TSMC predicted first-quarter revenue would hit a new record of between $12.7 billion and $13 billion, versus $10.3 billion in the same period a year earlier.
TrendForce recently said TSMC’s 7nm node is likely to account for 30 percent of revenue owing to chip orders from AMD, Nvidia, Qualcomm and MediaTek. TSMC’s revenue is expected to increase 25 percent in Q1 and set a new high on the back of surging demand for 5G, HPC, and automotive applications.