TSMC Reports Record Profits, Spend $ 44 Billion to Improve Capacity in 2022

What just happened? The chip shortage may be bad news for consumers, but it’s not a depressing time for TSMC. The chipmaker today announced record quarterly profits, raised its growth forecast and announced it would spend between $ 40 billion and $ 44 billion to upgrade its capabilities in 2022.

Unprecedented demand for components means chipmakers have their orders full and are struggling to keep up with demand. As a result, TSMC income rose 24.1% to $ 15.74 billion in the fourth quarter of 2021, while net profit jumped to $ 166.2 billion ($ 6.01 billion) from $ 142.8 billion a year earlier, exceeding analysts’ expectations.

The company’s bottom line is expected to be equally healthy in the first quarter of 2022. It forecasts sales of $ 16.6 billion to $ 17.2 billion in the first quarter, at least 5% above estimates.

TSMC

It appears that TSMC does not anticipate a slowing in demand for chips in the next few years. The company said it plans to invest heavily in new factories in different regions, spending between $ 40 billion and $ 44 billion to expand and upgrade capacity in 2022. Bloomberg reports that the figure is $ 10 billion higher than it spent last year and 43% higher than the $ 25 billion to $ 28 billion Intel plans to spend on chipmaking in 2022.

TSMC chief executive CC Wei said in an online results briefing (via Reuters) that the chipmaker enters a period of higher structural growth. The company expects the “multi-year industrial megatrend” of high demand for chips to be driven by new technology and has raised its annual growth rate targets from 10-15% to 15% -20%. Wei added that any risk of oversupply in the coming years would be mitigated by increasing demand for technology products such as electric cars.

“Even if a correction were to occur, we believe it might be less volatile for TSMC due to our position as a technology leader and structural megatrend,” Wei said.

The shortage of chips still impacts the prices and availability of GPUs, SSD controllers with a PCIe 3.0 interface, DDR5 RAM, consoles, vehicles, laptops and common household appliances. It even prompted Sony to ramp up PS4 production because no one could buy a PS5.

But there have been some positive signs recently. Graphics card makers including Gigabyte, Asus, MSI and ASRock expect shipments to increase this year as mining demand declines thanks to Ethereum’s upcoming shift from a proof of work mechanism to a proof of participation. Additionally, PC hardware shortages started to ease in November 2021. The chip crisis could still last for some time, but we should start to see supply and demand stabilize a bit in the future. close.