Since the late 70s, microprocessors have made their way into nearly everything: microwaves, toasters, TVs, and of course our computers. But as we enter the second decade of the new millennium, it’s Taiwan Semiconductor Manufacturing Co.’s (TSMC) chips that are in high demand.

The Taiwan-based chip fabricator plans to extend its lead over rivals Samsung and Intel in the new year. During the company’s recent fourth-quarter 2020 earnings call, TSMC announced plans to ramp full-year capital expenditures to between $25 billion and $28 billion, up from $17 billion in 2020.

The news comes as TSMC posts a record quarter, reporting net income that grew 23% year over year to approximately $5.1 billion, and revenue of about $12.9 billion, up 14% year-over-year.

The ramp in production also comes in response to a global semiconductor shortage triggered by surging demand, particularly in the consumer space and automotive industry as infotainment and driver aids become more sophisticated.

TSMC is one of the most advanced high-volume semiconductor fabricators on the market. The company is capable of producing 5-nanometer chips, which are currently being used in Apple’s A14 and M1 processors. Meanwhile, the company’s older 7-nanometer manufacturing process is used by chip giants AMD, Nvidia, and Qualcomm, to name just a few.

And TSMC could soon add Intel to its long list of customers, according to a recent Bloomberg report. Citing anonymous sources familiar with the talks, the outlet reports that Intel is negotiating with both TSMC and Samsung to fabricate the company’s flagship chips based on a new 4-nanometer process.

Intel has suffered repeated delays bringing its 10-nanometer chips to market, with the first Xeon Scalable processors to use the technology yet to reach the market. Intel EVP and GM of Client Computing Gregory Bryant did recently note that IceLake-based Xeons had entered volume production with shipments expected to begin later this quarter.

Additionally manufacturing yields have put Intel nearly a year behind on its next-generation 7-nanometer process, which isn’t expected to reach the market until late 2022 or early 2023, about the time TSMC is expected to begin shipments of 3-nanometer processors. This alone was cause for concern for many investors, which urged Intel to consider moving production to external fabs just as rival AMD had done previously.

Under investor pressure and increased competition, Intel’s board of directors moved to replace CEO Bob Swan with VMware CEO Pat Gelsinger, who returns to Intel after 15 years. If Gelsinger moves forward with plans to outsource fabrication to TSMC, something analysts believe is likely, the fabricator is ready to meet demand.

According to Bloomberg, TSMC is prepared to convert a new facility in Baoshan, China, to production status in order to meet demand for the new chips.

Intel declined to comment on the rumored talks.

Despite the pandemic, chipmakers faired well in 2020, according to a new report from Gartner. Market revenue grew 7.3% last year, a major rebound from a 12% decline in 2019.

According to Andrew Norwood, research VP at Gartner, while the pandemic depressed several markets, work from home and e-learning initiatives helped to prop up the semiconductor market.

“In early 2020, the expectation was that COVID-19 would have a negative impact across all end equipment markets, but the actual effect was more nuanced,” Norwood explained in a statement. “Automotive, industrial, and some areas of the consumer market were hit hard by reduced enterprise and consumer spending. However, lockdowns vastly increased work from home and e-learning, and any markets that facilitated those activities benefited.”

He added that these trends also helped to drive demand for server products, as hyperscalers rushed to bolster their systems for the spike in traffic triggered by the nearly overnight shift to remote work. Gartner also reported strong revenue growth in the memory market driven in large part by the shift to remote work.