TSMC board approves $743M bond sale to build Arizona facility

Posted:
in AAPL Investors edited March 22
Apple chip partner TSMC will issue bonds worth NT$21.1 billion (US$743 million), in a bid to fund efforts to expand its production, allowing it to make more chips like Apple Silicon.




On March 1, it was reported that TSMC was preparing a bond sale to add more funds to its war chest for expansion. While earlier reports indicated the plans involved bonds worth NT$16 billion (US$565 million), the actual amount it intends to raise is a much higher figure.

In a resolution approved by the board of directors, TSMC will offer NT$21.1 billion in unsecured bonds, according to Digitimes. The bonds will consist of a five-year group worth NT$4.8 billion with a 0.5% coupon rate, along with a seven-year version with a 0.55% coupon rate at NT$11.4 billion, and a 10-year tranche for NT$4.9 billion with a 0.6% coupon rate.

The funds raised by the bond sale will go into the establishment of a new facility and equipment purchases. This is anticipated to be a new chip factory in Arizona, one that could be up and running by 2023 if all goes well.

However, to set up a 5-nanometer facility like the one in Arizona, it requires a lot more funding than what will be raised in the bond sale. Such an effort requires a budget in excess of $10 billion to pull off.

The bond sale is only part of a larger bond sale that TSMC intends to perform. In February, it revealed plans to issue up to $NT120 billion in unsecured bonds, and to act as a guarantor to TSMC Global for further US dollar-denominated senior unsecured corporate bonds valued at up to US$4.5 billion.

TSMC is an important chip partner for Apple, as it produces chips like the A-series used in the iPhone and iPad, and the M1 chips used in new Macs. The company is also thought to be working on custom chips that could be used in the "Apple Car."


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Comments

  • Reply 1 of 4
    blastdoorblastdoor Posts: 2,340member
    Seems strange that chip makers like to build factories in places with little water. 
    viclauyycwatto_cobra
  • Reply 2 of 4
    JWSCJWSC Posts: 874member
    blastdoor said:
    Seems strange that chip makers like to build factories in places with little water. 
    Why?  I was unaware that water was needed in the water fab process.

    BTW, woohoo for Arizona!
    edited March 22 watto_cobra
  • Reply 3 of 4
    mknelsonmknelson Posts: 674member
    JWSC said:
    blastdoor said:
    Seems strange that chip makers like to build factories in places with little water. 
    Why?  I was unaware that water was needed in the water fab process.

    BTW, woohoo for Arizona!
    heh- water fab…

    2009 article: "One manufacturing plant uses anywhere between 2 to 4 million gallons of very, very pure water—we call it ultrapure water—per day, and that, on the average, is roughly equivalent to the water usage of a city of maybe 40 000, 50 000 people."

    Intel has a site where you can see the reporting of usage at their fabs: 
    https://www.exploreintel.com

    Chandler Arizona site used 117 million gallons last quarter.
    killroywatto_cobra
  • Reply 4 of 4
    danoxdanox Posts: 485member
    mknelson said:
    JWSC said:
    blastdoor said:
    Seems strange that chip makers like to build factories in places with little water. 
    Why?  I was unaware that water was needed in the water fab process.

    BTW, woohoo for Arizona!
    heh- water fab…

    2009 article: "One manufacturing plant uses anywhere between 2 to 4 million gallons of very, very pure water—we call it ultrapure water—per day, and that, on the average, is roughly equivalent to the water usage of a city of maybe 40 000, 50 000 people."

    Intel has a site where you can see the reporting of usage at their fabs: https://www.exploreintel.com

    Chandler Arizona site used 117 million gallons last quarter.

    Sounds like a class action suit coming up.....
    watto_cobra
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