TSMC, the world’s largest contract chipmaker and a key
supplier to Apple, said it would set up a chip plant in Japan that will
use older chipmaking technology, a segment currently under a severe supply
shortage due to robust demand from automakers and tech companies. But
production from the plant is only likely to begin by late 2024.
The company and Taiwan in general have become central in
efforts to resolve a pandemic-induced global chip shortage, which has forced
automakers to cut production and hurt manufacturers of smartphones, laptops,
and consumer appliances.
“TSMC is working closely with our customers to plan our
capacity and investing in leading edge and speciality technologies to support
their demand,” Chief Executive Officer C. C. Wei told an online earnings
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 and declined to disclose details such as expenditure
and capacity.
TSMC posted a net profit of TWD 156.3 billion in
July-September, well above the TWD 149 billion average of 22 analyst estimates
compiled by Refinitiv. That was 13.8 percent higher than the same period of
last year.
Advanced chips made by TSMC, formally known as Taiwan
Semiconductor Manufacturing Co, are used in everything from high-end
smartphones like Apple's newly unveiled 5G iPhone 13, to artificial
intelligence, cars, and a wide variety of lower-end consumer goods.
Wei said TSMC's capacity will remain "tight" this
year and throughout 2022, adding its chip pricing will "remain strategic
not opportunistic to reflex our value creation."
"Our third quarter business was mainly supported by
strong demand across all four growth platforms," Chief Financial Officer
Wendell Huang said, referring to strong chip demand including those for
smartphones, cars, and "Internet of Things" — the concept of
connecting household devices to the Internet.
"Moving into fourth quarter 2021, we expect our
business to be supported by strong demand for our industry-leading 5 nanometre
technology."
The company lifted its revenue growth forecast for 2021 to
about 24 percent, versus an earlier forecast of above 20 percent, citing an
"industry megatrend" of strong chip demand.
Wei said the company has entered a period of "higher
structural growth" and set a long-term target of "50 percent and
higher" for its gross margins.
TSMC's revenue for the quarter climbed 22.6 percent to
$14.88 billion, in line with the company's prior estimated range of $14.6
billion to $14.9 billion.
For the quarter ending in December, TSMC forecast revenue of
$15.4 billion to $15.7 billion, compared with $12.68 billion in the same period
a year earlier.
TSMC shares have risen about 8.5 percent so far this year,
giving the company a market value of $526.3 billion, more than double that of
competitor and client Intel.
They closed up 0.4 percent on Thursday, broadly in line with
a 0.2 percent rise in the broader market. -Reuters