TSMC Investing Heavily in 5nm Fabrication and Expanding 7nm Capacity

Silicon manufacturer TSMC's capital expenditure will rise to between $14 and $15 billion USD in 2020, which is significantly higher than 2019's $10-$11 billion expenditure. The increase consists largely of investments in expanding the company's output of 7nm products, as well as creating a large 5nm production capacity, as reported by EXPReview. The publication's sources say that of the increase of $4 billion in expenditure, $1.5 billion will go to expanding 7nm capacity with $2.5 billion going to building up a significant 5nm production line.

Currently, the huge demand for 7nm silicon stems largely from AMD, as TSMC is manufacturing for both AMD' Ryzen 3000 CPUs and Navi GPUs such as the RX 5700 and RX 5700 XT, all which are on the 7nm process. Apple also uses 7nm for the current iPhone 11, along with a heap of other customers.

However, this large demand is expected to rise further in 2020 as more products migrate to 7nm silicon, such as budget-friendly iPhone SE2 which will also be launched in 2020 with 7nm silicon -- In fact, it's the same A13 processor as featured in the current-generation iPhone 11. 

Next to the demand for 7nm, advancements also have to be made in the next step down at the 5nm process, so TSMC is also investing heavily there. The upcoming iPhone 12 is expected to feature the upcoming A14 chip, which will reportedly be fabricated on the 5nm process -- and given that iPhone 12 sales are expected to be brisk, that leaves TSMC with a lot of orders to fulfill for 5nm silicon -- supposedly, Apple has already reserved two-thirds of TSMC's 5nm production capacity.

In addition to Apple being the first major customer for 5nm silicon, Huawei HiSilicon is also expected to make the jump to 5nm, further increasing TSMC's workload.