TSMC Announces Chip Plant in Japan, Reports ‘Tight’ Capacity Through 2022

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The logo of Taiwan Semiconductor Manufacturing Co (TSMC) is pictured at its headquarters in Hsinchu, Taiwan, January 19, 2021. REUTERS / Ann Wang / File Photo GLOBAL BUSINESS WEAD AHEAD

  • Q3 profit of T $ 156.3 billion vs. T $ 149 billion of market forecasts
  • Third Quarter Revenue Up 22.6% YoY in US Dollars
  • TSMC Raises 2021 Revenue Growth Target to Around 24%
  • Japanese plant to start production by end of 2024

TAIPEI, Oct. 14 (Reuters) – Taiwanese chip giant TSMC (2330.TW) on Thursday announced plans to build a new plant in Japan to meet the long-term appetite for chips and said that in the short Over time, tight supplies would likely continue into 2022 amid booming demand during the COVID-19 pandemic.

TSMC, the world’s largest contract chip maker and a key supplier to Apple Inc (AAPL.O), has announced that it will establish a chip factory in Japan that will use older chip-making technology, a segment currently facing a severe supply shortage due to strong demand from automakers and technology companies. But production at the plant is not expected to start until the end of 2024.

Society and Taiwan in general have become central in efforts to address a pandemic-induced global chip shortage, which has forced automakers to cut production and hurt manufacturers of smartphones, laptops, and smartphones. consumer devices.

“TSMC is working closely with our customers to plan our capacity and invest in advanced and specialized technologies to meet their demand,” CEO CC Wei said in an online results briefing after the company posted higher-than-expected profits in the third quarter.

He said the expansion plan in Japan was pending approval from the company’s board of directors and declined to disclose details such as spending and capacity.

TSMC posted a net profit of T $ 156.3 billion ($ 5.56 billion) in July-September, well above the average of T $ 149 billion of 22 analyst estimates compiled by Refinitiv. This was 13.8% more than the same period last year.

Advanced chips manufactured by TSMC, formerly known as Taiwan Semiconductor Manufacturing Co, are used in everything from high-end smartphones like the recently unveiled 5G iPhone 13 by Apple, to artificial intelligence, cars and a wide variety of low-end consumer goods.

Wei said TSMC’s capacity will remain “tight” this year and through 2022, adding that the pricing of its chips “will remain strategic and not opportunistic to reflect our value creation.”

“Our business in the third quarter was mainly supported by strong demand across all four growth platforms,” said CFO Wendell Huang, referring to strong demand for chips, especially for smartphones, cars and “ Internet of things “- the concept of connecting household appliances to the Internet.

“As we approach the fourth quarter of 2021, we expect our business to be supported by strong demand for our state-of-the-art 5 nanometer technology. “

The company raised its revenue growth forecast for 2021 to around 24 percent, from an earlier forecast of over 20 percent, citing an “industry megatrend” of strong demand for chips.

Wei said the company has entered a period of “higher structural growth” and has set itself a long-term goal of “50% and more” for its gross margins.

TSMC’s revenue for the quarter climbed 22.6% to $ 14.88 billion, matching the company’s previously estimated range of $ 14.6 billion to $ 14.9 billion.

For the quarter ending in December, TSMC forecasts revenue of $ 15.4 billion to $ 15.7 billion, up from $ 12.68 billion in the same period a year earlier.

TSMC shares have risen about 8.5% so far this year, giving the company a market value of $ 526.3 billion, more than double that of its competitor and customer Intel Corp (INTC .O).

They closed 0.4% higher on Thursday, broadly in line with a 0.2% increase in the broad market (.TWII).

($ 1 = 28.0950 Taiwan dollars)

Reporting by Yimou Lee and Ben Blanchard; Editing by Christopher Cushing and Ana Nicolaci da Costa

Our Standards: Thomson Reuters Trust Principles.


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