Taiwan Semiconductor Manufacturing Co Ltd (TSMC) aims to boost capital expenditure next year but doesn't plan to get caught up in the wave of M&As engulfing the industry, the chief executives of the world's largest contract chipmaker said.
The Apple Inc supplier is interested in buying capacity and intellectual property, but is not currently engaged in any significant merger or acquisition (M&A) talks, CEOs Mark Liu and C C Wei said on November 19 in a rare media interview.
The comments come at a time of unprecedented consolidation in the chip sector. The value of M&As has topped $80 billion this year, Thomson Reuters data showed, as manufacturers seek to make more types of chips to meet demand promised by the Internet of Things - where chips are installed in everyday goods.
On November 18, ON Semiconductor Corp became the latest dealmaker with a $2.4 billion offer for Fairchild Semiconductor International Inc. Hours earlier, Renesas Electronics Corp said it was ready to spend billions of dollars to protect its market share from merging rivals.
"We are looking for opportunities when the opportunity comes," Liu said. "In terms of capacity, we haven't seen very attractive ones, but we certainly are not excluding it."
TSMC is one of the world's biggest spending chipmakers along with Samsung Electronics Co Ltd and Intel Corp .
It began the year with a capital expenditure estimate of $12 billion, but weakening demand from China factored among reasons to cut the figure twice to $8 billion - a four-year low.
"It (2016 capex) won't be a small amount. We won't be conservative," Liu said, declining to provide a figure. "We do see signs of (our customers) replenishing inventory recently. It just shows the slowing is not continuing." TSMC said Chinese revenue is still growing at around 20 percent, and that it expects a similar level next year.
The chipmaker is considering building its first plant in China making 12 inch wafers - or large bases on which chips are etched - and a decision on the matter could be made by the first half of next year, Liu and Wei said. "We are looking at all possibilities," said Wei at the firm's headquarters in Hsinchu, outside of the capital Taipei.
Wei and Liu are being groomed to take ultimate control of the chipmaker, which 84-year-old founder and chairman Morris Chang built into a major rival to Intel and Samsung.
The pair have held complementary posts since March 2012 when they were chief operating officers before assuming their current roles in November 2013. Previously, they were senior vice presidents - Wei for business development and Liu for operations.
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