TSMC Profit Beats Estimates Thanks to Prolonged Chip Crunch

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(Bloomberg) -- Taiwan Semiconductor Manufacturing Co. projected quarterly gross good up of estimates, underscoring the voracious request for caller iPhones and chips that powerfulness everything from TVs to cars.

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Asia’s astir invaluable institution foresees income of $16.6 cardinal to $17.2 cardinal successful the archetypal 4th of 2022, astatine slightest 5% up of analysts’ mean projection. Apple Inc.’s astir important chipmaker besides intends to walk $40 cardinal to $44 cardinal expanding and upgrading capableness successful 2022, up much than $10 cardinal from past year.

Both numbers affirm TSMC’s rod presumption successful the marketplace during an unprecedented spot shortage triggered by the pandemic, a planetary shortage that’s walloped the accumulation of automobiles, mobile phones and crippled consoles. With the crunch showing nary signs of abating, TSMC has been moving astatine near-full capableness implicit the past twelvemonth and is present investing heavy successful caller fabs from its location land to Japan and the U.S. to conscionable aboriginal demand.

Steady investments person helped it support a technological pb implicit Intel Corp. to Samsung Electronics Co., which served it good successful 2021. The Taiwanese institution reported a better-than-expected 16% leap successful nett income to a grounds NT$166.2 cardinal ($6 billion).

Delivery times for chips accrued by six days to astir 25.8 weeks successful December compared with November, according to probe by Susquehanna Financial Group. That lag marks the longest hold clip since the steadfast began tracking the information successful 2017.

What Bloomberg Intelligence Says:

Taiwan Semiconductor Manufacturing’s 4Q income of $15.81 billion, which transcend the company’s guidance by $110 million, indicates stronger-than-expected gross from the astir precocious 5-nanometer (nm) node process for smartphones and high-performance machine chips.

--Charles Shu, analyst

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Analysts expect TSMC to further boost its superior expenditure plans to summation supply. The institution has said investments successful a Japan fab for much mature technologies volition beryllium “incremental” to the $100 cardinal spending it had antecedently announced.

Sales successful the December 4th reached NT$438.2 billion, besides a record, based connected antecedently released monthly gross numbers. The institution present expects gross maturation of 15% to 20% connected mean successful coming years, up from erstwhile projections.

“TSMC is astir apt to rise its $100 cardinal capex program for 2021-23E to conscionable its expanding customers’ demand,” Citigroup analysts wrote successful a enactment this week. “TSMC is connected way to go the largest semiconductor institution worldwide successful presumption of gross earlier 2024E with continuous emergence successful net and expanding returns to investors.”

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