Taiwan Chip Maker to Raise R&D Nearly 40%

The Taipei Times reports today that Taiwan Semiconductor Manufacturing Company (TSMC) in Hsinchu, Taiwan plans to raise its research and development spending by 39 percent next year to NT$50 billion (US$1.63 billion), due to more aggressive competition in TSMC’s market.

TSMC is the world’s largest contract chip manufacturer. At present, the company does not directly compete with industry giants Intel in the U.S. and Samsung in Korea that make logic and memory chips. However, both Intel and Samsung have recently begun making chips under contract to other companies, making them more likely to be direct competitors to TSMC in the future.

Company chairman and chief executive Morris Chang announced the firm’s R&D plans in a speech yesterday at an event by the Taiwanese think tank Chung-hua Institution for Economic Research. “Intel is the semiconductor industry’s Mercedes-Benz,” Chang reportedly told the group, adding “while TSMC is a Toyota.”

The Taipei Times quotes Chang as saying the growing popularity among consumers for smaller devices like netbooks and smartphones favors TSMC. However, he acknowledged that the growing appreciation of the New Taiwan dollar against the U.S. dollar would be a negative factor for the company.

Photo: Peter Shanks/Flickr

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