TAIPEI (Reuters) -Taiwan Semiconductor Manufacturing Co. Ltd (TSMC) said on Thursday it was doing everything in its power to increase productivity and alleviate a global shortage shortage, but that tight inventory is likely to continue until next year.
The world’s largest contract shoemaker said during a revenue briefing he was expanding capacity and working to keep prices reasonable.
The remarks come after the Taiwanese firm reported a 19.4% increase in profit in the first quarter, beating market expectations, on strong demand for a global shift to homework.
TSMC, which includes Apple Inc and Qualcomm Inc customers, has cited ‘several years of growth opportunities’ as the COVID-19 pandemic fueled demand for advanced chips for devices such as smartphones and laptops.
The business was boosted by the scarcity of chips that initially forced carmakers to reduce production, but now hurt manufacturers of smartphones, laptops and even devices. TSMC said on Thursday it expects the disk shortage for its auto clients to decrease significantly from next quarter.
“Our business in the first quarter was supported by HPC – related demand, balanced by a lighter seasonality of smartphones than in the past year,” said Wendell Huang, vice president and chief financial officer.
“In the second quarter of 2021, we expect our revenue to be flat as HPC-related demand continues to grow, offset by the seasonality of smartphones.”
TSMC’s net profit for January-March reached T $ 139.7 billion ($ 4.93 billion), compared to the average T $ 134.01 billion of 22 analysis estimates compiled by Refinitiv.
Revenue rose 25.4% to a record $ 12.92 billion, in line with the company’s earlier estimate of $ 12.7 billion to $ 13 billion.
The second quarter revenue was forecast to be between $ 12.9 billion and $ 13.2 billion, compared to $ 10.38 billion in the same period a year earlier. It also increased its revenue growth forecast for 2021 to around 20%, compared to an earlier forecast of a mid-teens percentage.
TSMC said this month that 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 increase its advanced disk-making capacity.
CC Wei, chief executive, said the massive investment plan was driven by a ‘stronger customer engagement’ over the company’s most advanced 5-nanometer node technology, as well as the upcoming 3-nanometer node, which is expected later this year will enter into risk production.
The Taiwanese company on Thursday increased capital spending on the production and development of advanced chips to about $ 30 billion this year, from $ 25 billion to $ 28 billion it predicted in January.
Analysts are positive about the company’s massive expansion plan and expect global demand for advanced chips to increase as fifth-generation telecommunications technology (5G) and artificial intelligence applications become more widely accepted.
TSMC shares have risen about 16% so far this year and more than doubled in the past year, giving TSMC a market value of $ 558 billion, more than twice that of Intel and higher than that of South Korean technology giant Samsung Electronics Co. Ltd. .
The stock rose 1.14% on Thursday, compared to 1.25% for the benchmark index.
($ 1 = 28.3170 Taiwanese dollars)
(Edited by Yimou Lee and Ben Blanchard; Edited by Muralikumar Anantharaman and Christopher Cushing)