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TSMC announces chip plant in Japan, flags ‘tight’ capacity throughout 2022

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

  • Q3 revenue T$156.3 bln vs T$149 bln market forecast
  • Q3 income up 22.6% on 12 months in U.S. greenback phrases
  • TSMC lifts 2021 income progress goal to about 24%
  • Japan manufacturing facility to begin manufacturing by late 2024

TAIPEI, Oct 14 (Reuters) – Taiwan chip large TSMC introduced on Thursday plans to construct a brand new manufacturing facility in Japan to fulfill long-term urge for food for chips and mentioned, near-term, tight provides will seemingly proceed into 2022 amid booming demand through the COVID-19 pandemic.

TSMC, the world’s largest contract chipmaker and a key provider to Apple Inc , mentioned it might arrange a chip plant in Japan that can use older chipmaking know-how, a phase at present below a extreme provide scarcity as a consequence of sturdy demand from automakers and tech firms. However manufacturing from the plant is simply more likely to start by late 2024.

The corporate and Taiwan usually have change into central in efforts to resolve a pandemic-induced international chip scarcity, which has compelled automakers to chop manufacturing and damage producers of smartphones, laptops and shopper home equipment.

“TSMC is working carefully with our prospects to plan our capability and investing in vanguard and speciality applied sciences to assist their demand,” Chief Government Officer C. C. Wei informed a web based earnings briefing, after the corporate posted higher-than-expected income within the third quarter.

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He mentioned the enlargement plan in Japan was pending approval from the corporate’s board and declined to reveal particulars corresponding to expenditure and capability.

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TSMC posted a web revenue of T$156.3 billion ($5.56 billion) in July-September, nicely above the T$149 billion common of twenty-two analyst estimates compiled by Refinitiv. That was 13.8% larger than the identical interval of final 12 months.

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Superior chips made by TSMC, formally often known as Taiwan Semiconductor Manufacturing Co , are utilized in all the pieces from high-end smartphones like Apple’s newly unveiled 5G iPhone 13, to synthetic intelligence, automobiles and all kinds of lower-end shopper items.

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Wei mentioned TSMC’s capability will stay “tight” this 12 months and all through 2022, including its chip pricing will “stay strategic not opportunistic to reflex our price creation”.

“Our third quarter enterprise was primarily supported by robust demand throughout all 4 progress platforms,” Chief Monetary Officer Wendell Huang mentioned, referring to robust chip demand together with these for smartphones, automobiles and “Web of Issues” – the idea of connecting family units to the Web.

“Shifting into fourth quarter 2021, we anticipate our enterprise to be supported by robust demand for our industry-leading 5 nanometre know-how.”

The corporate lifted its income progress forecast for 2021 to about 24%, versus an earlier forecast of above 20%, citing an “{industry} megatrend” of robust chip demand.

Wei mentioned the corporate has entered a interval of “larger structural progress” and set a long-term goal of “50% and better” for its gross margins.

TSMC’s income for the quarter climbed 22.6% to $14.88 billion, according to the corporate’s prior estimated vary of $14.6 billion to $14.9 billion.

For the quarter ending in December, TSMC forecast income of $15.4 billion to $15.7 billion, in contrast with $12.68 billion in the identical interval a 12 months earlier.

TSMC shares have risen about 8.5% to this point this 12 months, giving the corporate a market worth of $526.3 billion, greater than double that of competitor and shopper Intel Corp .

They closed up 0.4% on Thursday, broadly according to a 0.2% rise within the broader market .

($1 = 28.0950 Taiwan {dollars})

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

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