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TSMC Capex Splurge Will Stoke Glut and Other Problems

TSMC’s recent capex strategy is a clear repudiation of the company's founder Morris Chang’s fab capacity and capital expenditure law.

(Photo: Taiwan Semiconductor Manufacturing Co., Ltd)

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By Bolaji Ojo

What’s at Stake?
TSMC will jack up capex up to 46% this year, building on huge increases over the last four years. Other chipmakers and foundries are racing to add new capacity, too. This is an extraordinary moment in the industry’s history and cooler heads need to prevail before the technology world ends up with manufacturing capacity surpluses that may take many years to absorb with indeterminable costs and other damages to the ecosystem. As the No. 1 global foundry, TSMC should provide the leadership required now by taking a leaf from its founder’s playbook; do not build to speculative demand.

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