TSMC Ups Spending and Sales Targets

Taiwan Semiconductor Manufacturing Co has boosted its spending and revenue growth targets for this year.

The world’s largest contract chipmaker said that its automaker industry clients should expect chip shortages to begin easing next quarter.

But overall deficits of critical semiconductors will last throughout 2021 and potentially into next year, Chief Executive Officer C.C. Wei told analysts on a conference call.

The world’s No. 1 maker of advanced silicon investments of about $30 billion on capacity expansions and upgrades this year, after spending $8.8 billion in the first three months, Chief Financial Officer Wendell Huang revealed.

The company had previously forecast spending of as much as $28 billion.

Sales in the June quarter may reach $13.2 billion, beating the average $12.8 billion seen by analysts.

Full-year revenue may climb 20% in dollar terms, ahead of the “mid-teens” growth predicted in January.

Surging demand for the chips that power Apple Inc.’s iPhones, smart televisions and connected cars has thrust TSMC into the center of a global supply chain crunch that has idled auto plants and fueled a shortage of popular consumer products like game consoles.

While Taiwan’s largest chipmaker has kept running at “over 100% utilization,” the firm doesn’t have enough capacity to satisfy all its customers and it has pledged to invest $100 billion over the next three years to expand.

Net income for the January-March period climbed 19% to NT$139.7 billion ($4.9 billion), versus the average analyst estimate of NT$136.2 billion.

Gross margin for the quarter eased to 52.4% from 54% in the three months prior, due in part to relatively lower levels of utilization and exchange-rate fluctuations.

First-quarter revenue rose 17% to NT$362.4 billion, according to a company statement last week.

With major American carmakers and other gadget suppliers facing a prolonged shortage of chips, U.S. President Joe Biden has proposed $50 billion to bolster semiconductor research and manufacturing at home.

The initiative could aid TSMC’s plan to build a cutting-edge fab in Arizona this year that could cost $12 billion.

Shares of TSMC have more than doubled over the past year. The stock advanced 1.1% on today before the company reported earnings.


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