Driven by the strong demand for artificial intelligence and advanced computing, global semiconductor giants are starting a new round of large-scale investment. Recently, TSMC and SK Hynix have successively announced their huge investment plans for the next few years.

TSMC plans to invest up to 32-36 billion US dollars in capital expenditures by 2025, a year-on-year increase of 12.5% to 14.3%, creating the second highest in history. This investment will mainly be used for the research and development and production capacity expansion of the most advanced process such as 2nm.

SK Hynix plans to invest as much as 74.8 billion US dollars by 2028, with 80% used for the research and development and production of high-bandwidth memory (HBM) chips.

Demand for 2nm exceeds expectations, and TSMC's capital expenditure is soaring next year.

Industry sources said that due to the continuous increase in research and development of the most advanced processes such as 2nm and the strong demand for 2nm beyond expectations, TSMC's capital expenditures are expected to reach between 32 billion and 36 billion US dollars in 2025, the second highest in history, with an annual increase of 12.5% to 14.3%.

It is reported that TSMC plans to achieve mass production of the 2nm process in 2025, and the mass production curve is expected to be similar to that of 3nm.

Earlier, the media reported that in order to meet the mass production of TSMC's 2nm process, equipment manufacturers are rapidly delivering equipment, especially EUV lithography machines. It is expected that more than 60 EUV lithography machines will be delivered in the next two years, with a total investment amount of more than 400 billion yuan (approximately 55 billion US dollars).

It is worth noting that in addition to Apple's first batch of 2nm capacity reservations, other non-Apple customers are also actively adopting this technology due to the strong demand for artificial intelligence.

TSMC declined to comment on the rumor and reiterated its progress on capital expenditures and 2nm technology, focusing on the April conference content.

At that time, TSMC emphasized that capital expenditures and production capacity planning are based on long-term structural market demand. Capital expenditures in 2024 are expected to be between 28 billion and 32 billion US dollars.

According to reports, TSMC is expanding the production capacity of advanced processes as planned:

Its Tainan 3nm factory will enter the mass production stage in the third quarter of this year, and the P8 factory will also introduce EUV lithography machines one after another next year. At the same time, the Hsinchu Baoshan 2nm factory will maintain strong loading capacity of EUV equipment in the next three years, and the construction of the Kaohsiung 2nm factory is also being carried out synchronously.

SK Hynix: Invest $60 billion in HBM

SK Hynix, the world's second-largest memory chip manufacturer, has announced an ambitious investment plan.

On Sunday, SK Hynix announced plans to invest as much as KRW 103 trillion (approximately US$74.8 billion) by 2028, of which 80% (approximately US$60 billion) will be used for the research and development and production of HBM chips.

SK Hynix has always been in a leading position in the field of HBM technology. In March of this year, SK Hynix began mass production of HBM3E chips on a large scale, and moved up the mass production time of the next-generation HBM4 chip to 2025.

As part of SK Hynix's bet on AI, SK Telecom and SK Broadband will also invest KRW 3.4 trillion in the data center business to further improve the group's AI ecosystem.

Although this is SK Hynix's first disclosure of its investment plan until 2028, SK Hynix has announced a series of investment plans this year, including a $3.87 billion investment in the construction of an advanced packaging factory and an AI product research center in Indiana, USA, and a KRW 14.6 trillion investment in the construction of a new memory chip complex in South Korea.

Given the booming demand for AI chips, SK Hynix plans to create KRW 80 trillion in revenue through operation and business reform by 2026.

In addition, SK Hynix plans to ensure KRW 30 trillion in free cash flow within three years to keep its debt-to-equity ratio below 100%. Although the group lost KRW 10 trillion last year, it is expected that pre-tax profit will reach KRW 22 trillion this year, and plans to increase this number to KRW 40 trillion in 2026.

Editor/Emily