The world’s biggest contract chipmaker, TSMC, says it is pushing hard to increase production but fears global supplies will continue to be restricted into 2022.
Taiwan Semiconductor Manufacturing Co said on Thursday it is doing all it can to reduce the worldwide chip shortage that hit so many industries throughout 2020 but the impact of the worldwide pandemic will continue to be felt well into next year.
“We have acquired land and equipment, and started the construction of new facilities. We are hiring thousands of employees and expanding our capacity at multiple sites,” Chief Executive Officer CC Wei told an online earnings briefing.
The chip shortage is going to take “a couple of years” to abate, Intel CEO Pat Gelsinger told the Washington Post on Wednesday.
TSMC’s comments come after the firm reported a 19.4% rise in first-quarter profit, beating market expectations, on strong chip demand amid a global shift to home working.
TSMC, whose clients include Apple Inc and Qualcomm Inc, had already flagged “multiple years of growth opportunities” as the Covid-19 pandemic fuelled demand for advanced chips to power devices such as smartphones and laptops.
Its business was boosted by the chip shortage that initially forced automakers to cut production, but is now also hurting manufacturers of smartphones, laptops and even appliances.
On Thursday, TSMC said it expects the chip shortage for its auto clients to be greatly reduced from the next quarter.
TSMC’s net profit for January-March hit T$139.7 billion ($4.93 billion), versus the T$134.01 billion average of 22 analyst estimates compiled by Refinitiv.
Revenue rose 25.4% to a record $12.92 billion, in line with the company’s earlier estimated range of $12.7 billion to $13 billion.
TSMC said this month it plans to invest $100 billion over the next three years to increase capacity at its plants, days after Intel Corp announced a $20 billion plan to expand its advanced chip making capacity.
The company also increased capital spending on the production and development of advanced chips to about $30 billion this year, up from a range of $25 billion to $28 billion it forecast in January.
Analysts are bullish about the company’s massive expansion plan, expecting global demand for advanced chips to surge as fifth-generation telecommunications (5G) technology and artificial intelligence applications are adopted more widely.
TSMC shares have risen about 16% so far this year and have more than doubled over the past one year, giving TSMC a market value of $558 billion, more than twice that of Intel’s and higher than that of South Korean technology giant Samsung Electronics Co Ltd.
- Reporting by Reuters