Apple supplier TSMC sees a global chip shortage that will last until 2022

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Taiwan Semiconductor Manufacturing Co. (TSMC) said Thursday it will do everything it can to increase productivity and alleviate global chip shortages, but tight deliveries are likely to continue next year.

The world’s largest contract circuit manufacturer said it is expanding its capacity and working to keep pricing reasonable.

“We have acquired land and equipment and started building new facilities. We are hiring thousands of employees and expanding our capacity in several locations,” CEO CC Wei said in an online earnings review.

It will take “a couple of years” to alleviate the chip shortage, Intel CEO Pat Gelsinger told the Washington Post on Wednesday.

TSMCs the comments come after the company announced 19.4 percent growth in the first quarter, beating market expectations with strong chip demand for the global shift to homework.

TSMC, whose customers are Apple and Qualcomm, had already marked “several years of growth opportunities” COVID-19 the pandemic fueled the demand for advanced chips for power supplies such as smartphones and laptops.

Its business was boosted by a chip shortage that initially forced carmakers to reduce production, but is now also hurting smartphone, laptop and even device manufacturers.

On Thursday, TSMC announced that it expects the shortage of chips for its auto customers to decrease significantly from the next quarter.

TSMC’s January-March net income was $ 4.93 billion (approximately Rs 36,800), compared to an average of $ 4.72 billion (approximately SEK 35,230) estimated by Refinitiv for 22 analysts.

Revenue rose 25.4 percent to a record $ 12.92 billion (approximately SEK 96,440) between the company’s previously estimated $ 12.7 billion (approximately SEK 94800) and $ 13 billion (roughly SEK 97,000).

The company forecast second-quarter revenue of $ 12.9 billion (approximately SEK 96,300) to $ 13.2 billion (approximately SEK 98,500), compared to $ 10.38 billion (approximately SEK 77,500) for the same period year. earlier. It also raised its revenue growth forecast for 2021 to about 20 percent compared to its previous forecast for mid-teens.

TSMC announced this month that it plans to invest $ 100 billion (approximately Rs 7.46 lakh crores) over the next three years to increase plant capacity days after Intel Corp announced its $ 20 billion (1.49 lakh crown) plan to expand its advanced chip production capacity. .

Wei said the massive investment plan was due to “stronger engagement with more customers” for the company’s most advanced 5-nanometer node technology as well as the upcoming 3-nanometer node, which is set to go into pilot production later this year.

The company also increased capital methods for the production and development of advanced chips to about $ 30 billion this year, after forecasting from $ 25 billion (approximately 1.87 lakh crowns) to $ 28 billion (about 2 lakh crowns). January.

Wei said TSMC sees its customers preparing for “higher inventory levels” to ensure security of supply due to geopolitics and pandemic uncertainties. As a result, he said the company’s capacity will remain “tight” throughout the year.

Analysts are on the rise with the company’s massive expansion plan and expect global demand for advanced chips to grow as fifth-generation communications technology (5G) and artificial intelligence applications become more widely deployed.

TSMC shares have risen about 16 percent this year so far and have more than doubled over the past year, with TSMC having a market capitalization of $ 558 billion (about Rs. 41 Lakh Crores), more than twice Intel’s market capitalization and higher as South Korea’s technology giant Samsung Electronics Co., ltd.

The stock rose 1.14 percent on Thursday, compared to 1.25 percent in the benchmark index.


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