Taiwan Semiconductor Manufacturing Co Ltd (TSMC) posted its record quarterly profit, fueled in part by Apple’s iPhone 12 family of 5G smartphones. TSMC hiked revenue and capital spending estimates to record levels as it forecast “multiple years of growth opportunities.”
The world’s top contract chipmaker has become increasingly bullish as remote work amid the coronavirus pandemic drives demand for advanced chips to power premium devices – demand that is expected to continue to surge as 5G technology and artificial intelligence applications are adopted more widely.
TSMC now expects to lift capital spending on the production and development of advanced chips to between $25 billion-$28 billion this year, as much as 60% higher than the amount it spent in 2020.
It also revised up its compound annual growth rate targets for revenue during the 2020 to 2025 period to 10%-15% from an earlier estimate of 5%-10%.
Partly helped by the launch of Apple Inc’s iPhone 12, TSMC’s net profit for the October-December fourth quarter soared 23% to T$142.8 billion ($5.1 billion), beating a Refinitiv consensus estimate of T$135.39 billion. Revenue jumped 22% to a record $12.68 billion.
TSMC predicted first-quarter revenue would hit a new record of between $12.7 billion and $13 billion, versus $10.3 billion in the same period a year earlier.
MacDailyNews Take: When Apple reports Q121 earnings results on January 27th, we expect the quarter will have gone quite well.
Apparently, TSMC’s gains don’t seem to be reflected in Apple’s gains. Most of Apple’s supplier’s good news is having the opposite effect on Apple which is a bit surprising. I’m not concerned as I feel certain those gains will show up for Apple sometime this year. It’s just that sometimes the discontinuity puzzles me. Anyway, TSMC is doing a fine job for chip fabrication and the company is putting some heavy pressure on Samsung and Intel fab factories. I’m glad Apple partnered with TSMC and has secured major production capacity from TSMC now and in the future. It will be good when TSMC’s Arizona plant gets into full swing this year, although I have heard it won’t have TSMC’s highest-end equipment. Apple should keep putting money into TSMC as Apple won’t have to worry about other competition.
I just don’t understand why Intel has to get TSMC to produce chips for them when Intel has plenty of fab capacity of its own. Intel should have been on the cutting edge of fab for years as it’s their main business. They sure charge enough for the chips to have plenty of revenue and profits, so I don’t know where all their money is going to.