Taiwan Semiconductor Manufacturing Company (TSMC) plans to allocate US$1 billion on R&D spending in 2011, compared with the US$800 million budgeted for 2010, according to company chairman and CEO Morris Chang.
Chang pointed out that capex allows the company to develop its R&D capabilities and production framework, which often result in increased sales or profitability. TSMC's capex for 2010 is set at NT$5.8 billion (excluding a budget for new businesses), showing a significant jump from US$2.9 billion in 2009 and an average of US$2 billion annually between 2004 and 2008, Chang noted.
Chang earlier revealed that TSMC expects sales to meet a 40% growth target in 2010 and another 10% rise in 2011. The IC foundry turned in NT$295.74 billion (US$9 billion) in 2009 consolidated revenues.
| TSMC: R&D and total operating expenses, 2006-09 (NT$b) |
| | 2006 | 2007 | 2008 | 2009 |
| R&D expense | 16.08 | 17.95 | 21.48 | 21.59 |
| Consolidated sales | 317.41 | 322.63 | 333.16 | 295.74 |
| R&D-to-sales ratio | 5.1% | 5.6% | 6.4% | 7.3% |
| Operating expenses | 28.55 | 30.63 | 37.31 | 37.37 |
| Operating expenses-to-sales ratio | 9.0% | 9.5% | 11.2% | 12.6% |
Source: Company, compiled by Digitimes, October 2010