TSMC to be first with 5nm volume production: Morris Chang

Taipei-The chairman of Taiwan Semiconductor Manufacturing Co. (TSMC) expects his company to become the first chipmaker to undertake mass production using the 5 nanometer process, anticipating the milestone to be achieved in two years.

The first phase of the project is expected to be completed in the first quarter of 2019, with mass production scheduled to start in early 2020, which would be an industry first, Morris Chang said at the ground-breaking ceremony for a 12-inch wafer fab using the 5nm process in Tainan on Friday.

The second phase of construction will begin in the third quarter of 2018 and also enter volume production in 2020, while the third phase is scheduled to start in the third quarter of 2019, with volume production set for 2021, according to TSMC.

"TSMC's Fab 18 represents three important commitments from our company: our commitment to future growth, our commitment to continue moving technology forward, and our commitment to Taiwan," Chang said at the ceremony.

"Our estimated investment in 5-nanometer technology is

approximately NT$700 billion, and total investment in Fab 18 will exceed NT$500 billion."

Once all three phases enter production, the foundry will produce more than 1 million 12-inch wafers a year and have created 4,000 jobs, the company said.

In describing TSMC's commitment to the pursuit of new

technologies, Chang said most international semiconductor companies ceased pursuing advanced technology upgrades seven or eight years ago.

"Now only three are left that continue to move technology forward, and TSMC is one of them," Chang said.

The new facility will also force TSMC to keep growing, Chang said, because for TSMC to earn back the NT$500 billion spent on the new fab over five years, based on a 15-20 percent return on invested capital (ROIC), it will need to reach NT$1.5 trillion in revenues.

That will require a 5-10 percent annual growth rate in sales in U.S. dollar terms over that time, Chang said.

The project will be TSMC's fourth mega 12-inch wafer fab in Taiwan and will focus on the 5nm lithography process, according to TSMC.

Source: Overseas Community Affairs Council