(Bloomberg) — Taiwan Semiconductor Manufacturing Co. forecast sales exceeding analysts’ estimates after earnings jumped 45%, helped by solid demand for chips used in everything from smartphones to cars.
Sales will rise to $17.6 billion to $18.2 billion in the quarter through June, the company said Thursday, implying growth of more than 30%. Analysts were estimating $16.9 billion on average, according to data compiled by Bloomberg. For the full year, revenue in dollar terms will top TSMC’s previous outlook for as much as 20%-plus growth, it said.
Consumers in the U.S. and Europe are snapping up mobile phones, smart televisions and other gadgets from makers such as Apple Inc. and Samsung Electronics Co. even as they exit pandemic-era work-from-home arrangements. Meanwhile a chip shortage is yet to ease — the wait times for semiconductor delivery grew again in March due to China’s Covid lockdowns and a Japan earthquake that hit production, according to research by Susquehanna Financial Group.
TSMC to Spend at Least $40 Billion to Address Chip Shortage
Net income rose to NT$202.7 billion ($7 billion) in the three months through March, the world’s biggest contract manufacturer of chips said. Analysts estimated NT$186.1 billion on average. Revenue jumped 36% to a record NT$491.1 billion based on previously reported numbers.
TSMC has kept production running in China, even as many other factories suspended operations to cope with the local pandemic policy. The chipmaker said in end-March that it will rearrange production priorities to deal with a shift in demand caused by Covid restrictions in China.
What Bloomberg Intelligence Says:
TSMC’s inventory strategy on key materials such as silicon wafers and industrial gases will be a key focus at the 1Q results briefing, as rising geopolitical tension and slow global wafer capacity gains keep the supply picture foggy.
– Charles Shum, analyst
Click here for research
The company reiterated that it’s earmarked $40 billion to $44 billion this year to expand and upgrade its facilities — a record outlay intended to keep the company at the forefront of a rapidly evolving technology and sating future demand. But analysts including Credit Suisse’s Randy Abrams warn that semiconductor sector growth could slow in the second half as higher interest rates, Chinese lockdowns and rising commodity prices sap spending on consumer electronics.
Shares of TSMC have lost about 7% this year, dragged down by a broader decline in global technology stocks and China’s lockdowns which have weighed on consumer demand and affected supply chains. The stock was little changed ahead of the company’s report.
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