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TAIPEI (Reuters) – Taiwan Semiconductor Manufacturing Co Ltd (TSMC) posted its best quarterly profit and raised its income and capital expense estimates to record levels as it predicted “several years of growth opportunities.”
The world’s largest contract chipmaker has become increasingly optimistic as remote working amid the coronavirus pandemic spurs demand for advanced chips to power high-end devices – a demand that is expected to continue to grow. increase as 5G technology and artificial intelligence applications are adopted more widely.
TSMC now plans to increase its capital spending for the production and development of advanced chips to between $ 25 billion and $ 28 billion this year, up to 60% more than the amount spent in 2020.
It also revised upward its compound annual growth rate targets for revenue over the period 2020-2025 to 10% -15% from an earlier estimate of 5% -10%.
Demand for chips has been so high that manufacturers around the world are sounding the alarm bells about shortages. Several automakers saw their production plans hit by insufficient supply, leading TSMC to see a surge in demand from automakers in the fourth quarter.
“We are working with our clients to mitigate the impact of the shortage,” CEO CC Wei told analysts during an online results briefing without giving further details.
The shortages have several causes, say industry executives and analysts, including wholesale purchases by Chinese tech giant Huawei Technologies, hit by US sanctions, a fire at a chip factory in Japan, coronavirus lockdowns in Southeast Asia and a strike in France.
More fundamentally, however, there has been underinvestment in 8-inch chip manufacturing plants owned primarily by Asian companies, meaning they have struggled to ramp up production as demand for phones continues to grow. , laptops and 5G cars grew faster than expected.
Partly helped by the launch of the iPhone 12 from Apple Inc, TSMC’s net profit for the fourth quarter from October to December climbed 23% to $ 142.8 billion ($ 5.1 billion ), exceeding Refinitiv’s consensus estimate of $ 135.39 billion. Revenue jumped 22% to a record $ 12.68 billion.
TSMC predicted that first-quarter revenue would hit a new record between $ 12.7 billion and $ 13 billion, up from $ 10.3 billion in the same period a year earlier.
The chipmaker’s stock price has jumped more than 70% in the past 12 months, giving it a market value of $ 560.7 billion.
(1 USD = 28.0050 Taiwan dollars)
Reporting by Yimou Lee and Ben Blanchard; Editing by Himani Sarkar and Edwina Gibbs
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