The world's
biggest contract chipmaker said it is expanding capacity and working to keep
pricing reasonable.
"We have acquired land and equipment, and started the
construction of new facilities. We are hiring thousands of employees and
expanding our capacity at multiple sites," Chief Executive Officer C. C.
Wei told an online earnings briefing.
The chip shortage is going to take "a couple of
years" to abate, Intel CEO Pat Gelsinger told the Washington Post on
Wednesday.
TSMC's comments come after the firm reported a 19.4% rise in
first-quarter profit, beating market expectations, on strong chip demand amid a
global shift to home working.
TSMC, whose clients include Apple Inc and Qualcomm Inc, had
already flagged "multiple years of growth opportunities" as the
COVID-19 pandemic fuelled demand for advanced chips to power devices such as
smartphones and laptops.
Its business was boosted by the chip shortage that initially
forced automakers to cut production, but is now also hurting manufacturers of
smartphones, laptops and even appliances.
On Thursday, TSMC said it expects the chip shortage for its
auto clients to be greatly reduced from the next quarter.
TSMC's net profit for January-March hit T$139.7 billion
($4.93 billion), versus the T$134.01 billion average of 22 analyst estimates
compiled by Refinitiv.
Revenue rose 25.4% to a record $12.92 billion, in line with
the company's earlier estimated range of $12.7 billion to $13 billion.
The firm forecast second-quarter revenue would be in a range
of $12.9 billion to $13.2 billion, compared with $10.38 billion in the same
period a year earlier. It also lifted its revenue growth forecast for 2021 to
about 20%, versus an earlier forecast of a mid-teens percentage.
TSMC said this month it plans to invest $100 billion over
the next three years to increase capacity at its plants, days after Intel Corp
announced a $20 billion plan to expand its advanced chip making capacity.
Wei said the massive investment plan was driven by
"stronger engagement with more customers" on the company's most
advanced 5 nanometer node technology as well as its upcoming 3 nanometer node,
which is scheduled to enter trial production later this year.
The company also increased capital spending on the
production and development of advanced chips to about $30 billion this year, up
from a range of $25 billion to $28 billion it forecast in January.
Wei said TSMC is seeing its clients preparing for "a
higher level of inventory" to ensure supply stability due to uncertainties
from geopolitics and the pandemic. As a result, he said, the company's capacity
will remain "tight" throughout the year.
Analysts are bullish about the company's massive expansion
plan, expecting global demand for advanced chips to surge as fifth-generation
telecommunications (5G) technology and artificial intelligence applications are
adopted more widely.
TSMC shares have risen about 16% so far this year and have
more than doubled over the past one year, giving TSMC a market value of $558
billion, more than twice that of Intel's and higher than that of South Korean
technology giant Samsung Electronics Co Ltd.
The stock rose 1.14% on Thursday, compared with 1.25% for
the benchmark index.
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