TSMC's 5nm orders are in the queue and capital expenditure is hitting a new high

TSMC's 5nm process is once again in line. In addition to Apple, AMD, and Qualcomm, automotive component giant NXP will also introduce related processes next year. The industry expects that the hot orders will drive TSMC to further expand its 5nm production capacity, plus 3nm trial production in the first half of the year and the start of the US plant. It is estimated that TSMC's capital expenditure next year will still be higher than this year's US$15 billion to US$16 billion, setting a new record.

TSMC did not respond to legal persons' estimates of capital expenditures for next year. The supply chain revealed that after TSMC stopped accepting orders from Huawei's HiSilicon for 5nm, TSMC was originally worried that the variables would increase, and other customers had not yet expressed their opinions on the position, which might lead to the third phase of the South Taiwan Science Park 18 plant (P3 plant) not being able to fill the production capacity. At one point, TSMC notified the P3 plant's delivery equipment suppliers to suspend shipments.

TSMC originally planned to use the enhanced version of 5-nanometer (N5P) for its main process, with installation scheduled to be completed in the fourth quarter, and to establish a production capacity of 20,000 to 30,000 pieces per month, mainly to cooperate with AMD's scheduled launch of a new generation of CPUs next year.

With the recent large orders from AMD and Qualcomm, HiSilicon's 5nm production capacity that had been stopped was quickly filled, and the monthly production capacity was pushed up to 60,000 pieces. The market's original concerns about the insufficient production capacity of the P3 plant of the 18th plant in the Southern Taiwan Science Park have been eliminated. This plan may be resumed again, but the monthly production capacity may be conservatively planned to be 20,000 pieces, and additional orders may be made depending on customer orders.

TSMC revealed earlier that 5nm will cover three generations with common process equipment, including the currently mass-produced 5nm, the enhanced version N5P and the 5nm miniaturized version N4. Among them, N5 is scheduled to be mass-produced next year; N5P will be mass-produced in 2022; and N4 will be mass-produced in 2023.