Giants increase spending billions of dollars on chip production

 Giants increase spending billions of dollars on chip production

TSMC pledged to pour $100 billion over the next three years, while Intel also plans to spend $20 billion on two new factories in Arizona to increase chip production.

Plans to increase investment and expand production have been announced by the semiconductor giants in turn, in an effort to meet growing demand as global chip shortages increase.

Taiwan Semiconductor Manufacturing Co (TSMC), the world's largest contract chipmaker, said it is building a $12 billion factory in Phoenix, Arizona, and another in Japan to increase the capacity of its devices. type of electronic chip. This year, the company's investment budget will increase by 4 billion USD to 44 billion USD for increasing production capacity. This is part of TSMC's commitment to spend 100 billion USD in the next 3 years to expand production and increase chip output to supply globally.

TSMC is not the only chipmaker to invest billions of dollars in high-tech factories, which tend to take three to four years to operate.

According to CNBC, another giant, Intel, has announced plans to spend $ 20 billion on two new chip factories in Arizona. This corporation has been present in Arizona for more than 40 years and this is a state with a long-standing semiconductor ecosystem. Other major chip companies with a presence in Arizona include On Semiconductor, NXP and Microchip...

Samsung, South Korea's largest company, hasn't released any specific plans for this year, but last month it revealed it spent more than $40 billion on the chip business last year.

According to research firm Gartner, in 2021, global semiconductor companies have spent 146 billion USD to improve research and production capacity. TSMC, Samsung and Intel - three of the largest chip makers in the world - account for 60% of this total investment, about $90 billion.

In addition to the big players, a number of lesser-known chip makers are also planning to increase production spending this year.

Infineon, a chip maker based in Munich (Germany) on February 3 said it will spend an additional 2.4 billion euros ($2.7 billion) on expanding operations to meet demand for chips in the world. semiconductor market.

Last week, chip maker ST Micro also mentioned plans to double its investment this year, to $3.6 billion. Last year, the Geneva-based company, whose biggest customers include electric carmaker Tesla and iPhone maker Apple, spent $1.8 billion to expand production.

The expansion of production and investment by firms will help some companies in the semiconductor supply chain benefit.

However, according to analysts, global manufacturing industries will still struggle with chip shortages for the next one to two years.

Glenn O'Donnell, director of research at Forrester analytics firm Forrester, told CNBC that chip demand will continue to grow, unabated. Firms have spent tens or even hundreds of billions of dollars to expand production, but this analyst believes that these investments are "not really enough".

In the short term, he forecast the recovery from chip shortages will be "difficult". In the long term, the risk of oversupply in the next 2-3 years is "less likely", because it will take some time to build the chip factories that the companies announced recently.