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Opinion
Tim Culpan

As Chip Rivals Struggle, TSMC Moves In for the Kill

A budget blowout is a signal that the world’s semiconductor giant will go to great lengths to stay on top.

Sometimes you just need to invest in the future.

Sometimes you just need to invest in the future.

Photographer: I-Hwa Cheng/Bloomberg

Being the world’s most dominant chipmaker just isn’t enough. Now Taiwan Semiconductor Manufacturing Co. is making a massive move to obliterate rivals.

After posting a record $17 billion in capital expenditure last year, the semiconductor foundry plans to boost that figure by 37% in 2021. That’s a rate of growth not seen since the company’s rebound from the global financial crisis in 2010. At the upper end of its $25 billion to $28 billion forecast, and based on estimates for revenue this year, TSMC will post a spending-to-sales ratio that will surpass 50% for the first time in a decade. Also known as capital intensity, this number came in at 37.9% last year, the median of the past decade.