"Strong Performance" Taiwan TSMC Chairman: "No Consideration to Acquire Intel Factory"

Wei Zhejia, chairman of Taiwan's TSMC, the world's largest foundry (semiconductor contract manufacturing) company, stated that they are not considering Intel's semiconductor factory acquisition at all. Intel, which once dominated the global semiconductor market, is currently undergoing intensive restructuring, including the spinoff of its foundry business, due to poor performance.

[Image source=Reuters Yonhap News]

According to Taiwan media such as United Daily News on the 18th, Wei said this in response to a question about Intel's foundry business spinoff during an online briefing on the company's Q3 corporate earnings held the previous day.

Intel, a leading American semiconductor company, is experiencing its worst crisis since its founding as it falls behind in the artificial intelligence (AI) competition. While competitors are recording strong performances riding the AI boom, Intel has been unable to overcome losses and has ultimately entered restructuring. Recently, Intel CEO Pat Gelsinger announced self-help measures including the spinoff of the foundry business and a 15% workforce reduction.

Regarding this, Wei explained that the "comprehensive semiconductor company in California" is a very important and good customer that continues to bring substantial orders to TSMC. Taiwan media speculated that this customer refers to Intel.

TSMC announced Q3 results the previous day that exceeded market expectations. Operating profit for Q3 reached $11.162 billion, a 58% increase compared to the previous year. Revenue for the same period rose 36.5% to $23.54 billion. TSMC's gross profit margin reached 57.8%. These strong results are evaluated as showing that TSMC's dominance is increasing in the global semiconductor market, which is being reorganized around AI semiconductors. TSMC, which counts Nvidia among its customers, is considered a representative company benefiting from the increase in AI demand.

Chairman Wei emphasized, "AI demand is strong, and this is just the beginning." He also explained, "Demand for customers' 2-nanometer process products is much higher than for 3-nanometer products," and that they will fully expand production facilities for advanced manufacturing processes and advanced packaging processes such as 'Chip on Wafer on Substrate' (CoWoS). Local media reported that accordingly, TSMC is expected to increase its capital expenditure (facility investment) to $38 billion (approximately 52 trillion won) next year.