The world’s largest contract chip maker says it is expanding capacity to keep prices reasonable.
Taiwan Semiconductor Manufacturing Ltd. (TSMC) says it is doing all it can to increase productivity and alleviate chip shortages worldwide, but scarcity is likely to continue. in the next year.
The world’s largest contract chip maker on Thursday said it was expanding capacity and working to keep prices reasonable.
“We have acquired land and equipment and started building new facilities. We are hiring thousands of employees and expanding our capabilities in multiple locations, ”chief executive CC Wei said during an online earnings press conference.
Intel CEO, Pat Gelsinger, told The Washington Post on Wednesday.
TSMC’s comments came after the company reported a 19.4% increase in first-quarter earnings, beating market expectations, as chip demand surged amid a global shift to home-made.
TSMC, whose clients include Apple Inc and Qualcomm Inc, flagged “many years of growth opportunities” as the COVID-19 pandemic spurred demand for advanced chips to power devices such as phones. smart and laptop.
Its business was driven by a chip shortage that initially forced carmakers to cut production, but is now hurting smartphone and laptop makers too. and even home appliances.
On Thursday, TSMC said it hopes the chip shortage for its auto customers will be significantly reduced from next quarter.
TSMC’s net profit from January to March reached NT $ 139.7 billion ($ 4.93 billion), compared with an average NT $ 134.01 billion ($ 4.73 billion). of the 22 analyst estimates compiled by Refinitiv.
Revenue rose 25.4% to a record $ 12.92 billion, matching the company’s previously estimated range of $ 12.7 billion to $ 13 billion.
The company forecasts second-quarter revenue will range from $ 12.9 to $ 13.2 billion, compared with $ 10.38 billion in the same period a year earlier. It also raised its revenue growth forecast for 2021 to around 20%, compared with the previous forecast for teen percentage.
TSMC said this month it plans to invest $ 100 billion over the next three years to increase capacity at its factories, days after Intel Corp announced a $ 20 billion plan to expand production capacity. Export your own advanced chips.
Wei says this massive investment plan is driven by “stronger interaction with more customers” on the company’s most advanced 5-nanometer node technology as well as the company’s upcoming 3-nanometer node technology. Ant goes into production testing later this year.
The company also increased capital spending on advanced chip production and development to around $ 30 billion this year, up from $ 25 billion to $ 28 billion it forecasted in January.
Wei said TSMC is seeing its customers prepare for “higher levels of inventory” to ensure stable supplies due to geopolitical uncertainties and pandemics. As a result, he said, the company’s capacity will remain “tight” throughout the year.
Analysts are optimistic about the company’s massive expansion plan, expecting global demand for advanced chips to increase as fifth-generation (5G) telecommunications and AI applications. created to be applied more widely.
As of now, TSMC shares have risen about 16% this year and have more than doubled from last year, giving TSMC a market value of $ 558 billion, more than double that of Intel and higher than the Korean technology giant Samsung Electronics Co Ltd.
Shares rose 1.14 percent on Thursday, compared with 1.25 percent for the benchmark index.