Taiwan Semiconductor Manufacturing Company's (TSMC) R&D spending, which reached almost NT$40 billion (US$1.36 billion) in 2012, is expected to hit another all-time high in 2013, according to industry sources.

TSMC's R&D expenses for 2012 accounted for almost 8% of the dedicated IC foundry's overall revenues, the sources noted. In the first half of 2013, TSMC already spent NT$22.6 billion on R&D, the sources said.

Unlike Intel and Samsung Electronics' vertical integration, TSMC is working closely with EDA, IP, software IP, systems software and design services providers – which the foundry has dubbed a "Grand Alliance." The TSMC-led alliance allocated a combined US$13.56 billion to R&D in 2012, the sources estimated.

The combined R&D spending of TSMC and its chip design partners are set to climb further in 2013, the sources believe.

TSMC chairman and CEO Morris Chang suggested previously that the input of total R&D resources through the "Grand Alliance" would be larger than that by any IDM.

TSMC has budgeted a record US$9.5-10 billion in overall capex for 2013. The foundry expects to initiate volume production of 20nm chips in early 2014, and move its 16nm FinFET process to risk production around the end of 2013.

Some industry watchers have estimated that TSMC's capex for 2014 could reach US$10-12 billion, as the foundry is looking to ramp up its sub-20nm production capacity at a fast pace.

By: DocMemory
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