Taiwan Semiconductor Manufacturing Co posted a record quarterly profit on Thursday, thanks to robust global demand for chips used in smartphones, laptops and other equipment.
Net profit for October-December at TSMC, the world’s largest contract chipmaker and a major Apple supplier, rose to NT$166.2 billion ($6 billion), up 16.4% from NT$142.8 billion a year earlier.
That was higher than the NT$161.6 billion average of 22 analyst estimates compiled by Refinitiv.
A pandemic-induced global chip shortage has forced automakers and electronics manufacturers to cut production but has kept order books full at TSMC and other chipmakers in Taiwan, which have become key in efforts to resolve the supply bottlenecks.
Revenue for the quarter climbed 24.1% to $15.74 billion in US dollar terms, 24% higher than a year earlier and slightly higher than the company’s prior estimated range of $15.4-15.7 billion.
TSMC’s capacity has been fully utilised with the company’s gross margin hit a high of 52.7%.
Chip Scarcity Continues
Asia’s most valuable listed company, TSMC has said tight chip supplies are likely to continue this year amid booming demand during the pandemic.
TSMC is viewed as a bellwether for global technology demand as it accounts for half of the world’s production of made-to-order chips.
“Silicon chips are a terrific proxy for the global economy because they are everywhere, from your car to your smart phone, from your laptop to your smart meter and from industrial robots to games consoles,” Russ Mould, investment director at AJ Bell in London, said.
“Industry estimates reckon that total semiconductor sales rose by more than quarter in 2021 to a record $553 billion,” he added.
“Such rapid growth does make you wonder whether the scramble for chips means the problem is actually excess demand rather than too little supply, if the highest-ever revenue figure from the industry is not enough to keep up.”
- George Russell, with Reuters