TSMC to invest US$28 bn in semiconductors

Source: ShutterstockSource: Shutterstock

TSMC revenue for the fourth quarter rose by 22% year-over-year, reaching a US$12.68 billion quarterly record, according to the fourth-quarter earnings report. Seeing continuing momentum growth in demands of semiconductors, the company is raising capital budgets to a record US$28 billion. For the whole year of 2020, the revenue grew by 25% and the net profit by 50%, both hitting a new peak. 

Global market grows in high demands

Wendell Huang, VP and Chief Financial Officer of TSMC anticipates global market for semiconductor to grow by 8%, which will bring the revenue growth by 15% this year.

“Our fourth quarter business was supported by strong demand for our industry-leading 5-nanometer technology, driven by 5G smartphone launches and HPC-related applications,” said Wendell Huang, VP and Chief Financial Officer of TSMC. 

Where will the investment be used?

Most of the planned capital budget for 2021 that will reach US$ 28billion is going to be concentrated on 3-, 5- and 7-nanometer products that are produced in Taiwan. 

Some would be allocated to the new factory in Arizona, US, looking into volume shipments for 5-nanometer chips by 2024.

2021 business outlook

Based on the current business outlook, the company is expecting the overall performance this year to be growing at a similar pace, steadily.

2021 revenue is expected to be between US$12.7 billion and US$13.0 billion, gross profit margin is expected to be between 50.5% and 52.5%; operating profit margin is expected to be between 39.5% and 41.5%.

“Moving into first quarter 2021, we expect our business to be supported by HPC-related demand, recovery in the automotive segment, and a milder smartphone seasonality than in recent years,” said Wendell Huang.

 

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