Taiwan Semiconductor Manufacturing Corp. has raised its capex for this year by more than US$400 million in light of strengthening demand for ICs.

In a meeting with Yu Shyi-kun, Taiwan premier, TSMC chairman Morris Chang said his company was committed to investing US$20 billion in new Taiwanese fabs, reported the Financial Times.

“This will include around $TN90 billion that we are preparing to invest this year. That is our plan and our promise,” Chang said.

TSMC recently told investors it was considering raising its planned 2002 capital expenditure to a level close to that of the US$2.2 billion spent in 2001 – an upward revision that reflected the company’s growing confidence that it was emerging from its worst sales slump.

TSMC said that its share of the global market for custom-made chips had risen during the semiconductor downturn and the company expected to benefit further from increased outsourcing from electronics companies, which are struggling to shoulder the heavy capital burden of building advanced new fabs, the Times reported.

The latest planned increase in capital expenditure underlines TSMC’s ability to fund its aggressive construction of advanced fabs capable of building chips using 300mm wafers.