TSMC was the sixth largest spender on R&D last year behind Intel, which spent $10.6 billion, Qualcomm which spent $3.4 billion, Samsung which spent $2.8 billion, Broadcom which spent $2.5 billion and ST which spent $1.8 billion.
TSMC's $1.8 billion will mostly be spent developing 28nm, 20nm and 16nm processes.
TSMC now has 4,500 professionals working in R&D.
In addition, TSMC's 2014 capex spend will be $9.5 billion to $10 billion.
28nm is expected to a account for 30% of TSMC's revenues this year. Last year's total revenues were $20 billion and 28nm revenues were $6 billion, up from $2.1 billion in 2012 and $150 million in 2011.
TSMC expects the foundry industry to grow 14% this year and reckons its own growth will exceed that by 'several percentage points'.