Asian chipmakers - FT.com Chipmakers are not from the same block. Taiwan Semiconductor Manufacturing Company is planning record investment to help meet demand for its contract services. That is very different from the likes of SK Hynix and the memory chipmakers still hoping the death of one of their number will lead to a sustained rise in prices. TSMC, the world's largest contract chipmaker by sales, will spend more than $8bn on capex this year - using more than four fifths of operating cash flow for a third consecutive year. Risky? Not so much. PC makers are still restocking as last year's flood- and tsunami-related supply chain disruptions ease. Demand for cutting edge chips to power Windows 8-compatible computers and for rivals to Apple's supposedly imminent iPhone 5 should lift sales later this year. But due to the high cost of production - much of TSMC's spend will go on expanding its ability to produce chips with a miniaturised circuit width of 28 nanometres or less - the number of contract manufacturers is limited. Intel, the largest chipmaker by sales, is also sniffing around the foundry business. That leaves the likes of chip designer Qualcomm with few choices. Alas supply in SK Hynix's memory chip market is not so limited. D-ram, or dynamic random access memory, prices have risen since Elpida collapsed, but Hynix and Micron (previously numbers two and four, far behind Samsung) are still reporting losses. A return of Elpida under a new owner could cut short the rally. TSMC is not threat-free either: Samsung could offer competition. And AMD spinoff, Global Foundries, will open its US 28nm-capable plant this year. Earnings valuations at Hynix and TSMC are in line with long-term averages. And both produce in-demand products. But TSMC is for now the better bet.