TSMC plans record investment in chip manufacturing expansion

TSMC

Chip manufacturing company, Taiwan Semiconductor Manufacturing Company (TSMC) – which supplies silicon for Apple – plans to spend up to $44 billion on increasing its manufacturing capacity in 2022. 

Year-on-year, TSMC’s fourth quarter revenue increased by 21.2 per cent while their net income and diluted EPS both increased by 16.4 per cent. Compared to the third quarter of 2021, the manufacturer’s fourth quarter results represented a 5.7 per cent increase in revenue and a 6.4 per cent increase in net income. All figures were prepared in accordance with TIFRS on a consolidated basis. 

In US dollars, fourth quarter revenue was $15.74 billion, which increased 24.1 per cent year-on-year and increased 5.8 per cent from the previous quarter. 

The gross margin for the quarter was 52.7 per cent, the operating margin was 41.7 per cent and the net profit margin was 37.9 per cent. 

In the fourth quarter, shipments of 5-nanometer accounted for 23 per cent of total wafer revenue; 7-nanometer accounted for 27 per cent. Advanced technologies such as 7-nanometer and more advanced technologies, accounted for 50 per cent of the total wafer revenue. 

“Our fourth quarter business was supported by strong demand for our industry-leading 5-nanometer technology,” TSMC chief financial officer Wendell Huang said. 

“Moving into the first quarter of 2022, we expect our business to be supported by HPC-related demand, continued recovery in the automotive segment and a milder smart phone seasonality than in recent years.” 

Based on TSMC’s current business outlook, the management teams is expecting the overall performance for first quarter 2022 to be as follows: 

  • Revenue is expected to be between US$16.6 billion and US$17.2 billion; 

And, based on the exchange rate assumption of 1 US dollar to 27.6 NT dollars, 

  • Gross profit margin is expected to be between 53 per cent and 55 per cent; 
  • Operating profit margin is expected to be between 42 per cent and 44 per cent. 

The management team further expects the 2022 capital budget to be between US$40 billion and US$44 billion. 

TSMC