TSMC to Boost 2nm Capacity with 8 New Fabs by 2025

Industry experts predict that Taiwan Semiconductor Manufacturing Company (TSMC) will maintain its capital expenditure range for this year, with further details on next year's spending plans expected during the financial briefing in January 2025. Current projections suggest that TSMC's capital expenditure for 2025 will surpass this year's levels, with a significant portion allocated to research and development.

TSMC is currently in its pre-earnings silent period, but insiders point to the company's aggressive push toward the mass production of 2nm technology as the primary driver for increased capital expenditures. Estimates indicate that TSMC's capital spending could reach between $32 billion and $36 billion in 2025, representing a 20% year-on-year increase. Key beneficiaries of this rise in investment include ASML and Applied Materials, along with several local partners in Taiwan.

TSMC's previous record for capital expenditure was set in 2022, when the company invested $36.29 billion. In its July earnings call, TSMC revised its 2023 capital expenditure range to between $30 billion and $32 billion, slightly raising the lower bound from its earlier projection of $28 billion to $32 billion. The actual capital expenditure for 2023 was $30.45 billion, falling just below the company's earlier expectations.

TSMC explained that the adjustment was driven by short-term market uncertainties, leading to a more cautious approach to spending. Looking ahead, the company is expected to keep its capital expenditure forecast unchanged in this week’s earnings call. However, a more substantial increase in spending is anticipated for 2025, with further details likely to emerge in early 2024.

Reports indicate that TSMC is ramping up its investment in 2nm process technology to meet stronger-than-expected demand. The company's capacity expansion plans are expected to include multiple phases across Taiwan, with facilities in Hsinchu and Kaohsiung, as well as new developments in the Southern Taiwan Science Park.

As TSMC gears up for increased capital expenditures next year, its investment in research and development is also expected to accelerate, ensuring the company remains at the forefront of semiconductor innovation.