'Record-High Net Profit' TSMC to Invest KRW 82 Trillion in Facilities This Year [Taiwan Chip Communication]

First-Quarter Net Profit Surpasses Expectations at KRW 26.7 Trillion
Revenue Increases by 35% Year-on-Year
Accelerated Expansion of 3-Nanometer Advanced Packaging Processes
Active Transition Toward High-Efficiency Production Systems

Taiwan's TSMC, the world's largest foundry (semiconductor contract manufacturing) company, reported its best-ever first quarter. Despite the ongoing war between the United States and Iran, the company posted record-high net profit, backed by surging demand for artificial intelligence (AI). Based on its overwhelming profitability, TSMC has announced aggressive facility investment plans to widen the gap with its competitors.

Taiwan TSMC. Yonhap News Agency

According to Taiwan Economic Daily News on April 20, TSMC's net profit for the first quarter rose 58.3% year-on-year, reaching 572.5 billion New Taiwan dollars (approximately 2.67 trillion won). This figure exceeds market expectations of 542.4 billion New Taiwan dollars. Revenue also surpassed expectations, increasing 35% from a year earlier.

TSMC's first-quarter revenue was driven by its 5nm and 3nm process technologies. Products based on the 5nm process accounted for 36% of segment sales, while 3nm products contributed 25%, meaning these two segments made up over 60% of total revenue for the first quarter of this year.

To sustain this momentum, TSMC is accelerating the expansion of its advanced packaging processes, with a particularly strong emphasis on increased investment in 3nm technology. The company plans to add a new 3nm fab to the gigafab cluster at the Tainan Science Park in southern Taiwan, aiming to begin mass production in the first half of 2027.

At the same time, TSMC intends to start mass production of 3nm chips at its second plant in Arizona, United States, in the second half of 2027. In Japan's Kumamoto Prefecture, the company is also working to introduce advanced 3nm process production at its second plant, replacing legacy manufacturing processes, with mass production targeted for 2028.

TSMC is also accelerating the transformation of its production system. The company is expanding its advanced packaging strategy from the existing chip-on-wafer-on-substrate (CoWoS) to a panel-based chip-on-panel-on-substrate (CoPoS) approach. CoPoS is an advanced packaging technology that can provide higher production efficiency compared to the traditional wafer-based CoWoS process.

Currently, TSMC is establishing a pilot line for CoPoS, with completion targeted for June. The industry expects mass production between 2028 and 2029. The company aims to further strengthen both production efficiency and technological competitiveness by building an integrated production system centered around the Hsinchu area in Taiwan, incorporating CoPoS, SoIC (System on Integrated Chip), and other technologies.

TSMC also expressed strong confidence in future AI demand. While TSMC Chairman Mark Liu acknowledged that the situation in the Middle East is contributing to macroeconomic uncertainty, he emphasized that demand related to AI remains extremely robust. He reaffirmed the company's previous forecast that annual revenue will grow by over 30% in U.S. dollar terms this year, maintaining an optimistic outlook that the AI industry's growth trend will continue for the next several years.

In fact, TSMC expects its second-quarter revenue to reach a record $39 billion to $40.2 billion, marking a significant increase from $30.1 billion in the same period last year. The company also plans to expand its annual capital expenditure to the upper end of its previous guidance, at around $56 billion (82 trillion won), maintaining its aggressive investment stance.

Taiwan Economic Daily News = Reporters Jong Longfeng, Yoon Hyejung, Zhu Jaqing / Translation = The Asia Business Daily

※ This column is published as part of a strategic partnership between The Asia Business Daily and Taiwan Economic Daily News.

This content was produced with the assistance of AI translation services.