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TSMC reports record profits, will spend $44 billion on upgrading capacity in 2022


NeoGAFs Kent Brockman

The chip shortage might be bad news for consumers, but it’s not a depressing time for the likes of TSMC. The chipmaker reported record quarterly profits today, raised growth projections, and announced it would spend $40 billion to $44 billion on upgrading capacity in 2022.

The unprecedented demand for components means that chip manufacturers have their orders full and are struggling to meet demand. As a result, TSMC’s revenue was up 24.1% to $15.74 billion in Q4 2021, while net profit jumped to T$166.2 billion ($6.01 billion) from T$142.8 billion a year earlier, beating analysts’ expectations.

The company’s bottom line is expected to be just as healthy during Q1 2022. It predicts sales of $16.6 billion to $17.2 billion in the first quarter, at least 5% more than estimates.

It appears that TSMC doesn’t envision demand for chips slowling down over the next few years. The company says it plans to invest heavily in new fabs in different regions, spending $40 billion to $44 billion expanding and upgrading capacity in 2022. Bloomberg reports that the figure is $10 billion more than what it spent last year and 43% higher than the $25 billion to $28 billion Intel plans to spend on chip manufacturing in 2022.

TSMC Chief Executive C. C. Wei told an online earnings briefing (via Reuters) that the chipmaker is entering a period of higher structural growth. The company expects the "multi-year industry megatrend" of high chip demand to be boosted by new technologies and has raised its annual growth rate targets to 15% - 20% from 10% - 15%. Wei added that any risk of oversupply in the coming years would be mitigated by the increase in demand for tech products such as electric cars.

"Even if a correction were to occur, we believe it could be less volatile for TSMC due to our technology leadership position and the structural megatrend," Wei said.

The chip shortage is still impacting prices and availability of GPUs, SSD controllers with a PCIe 3.0 interface, DDR5 RAM, consoles, vehicles, laptops, and common household appliances. It’s even caused Sony to increase PS4 production due to nobody being able to buy a PS5.

Rat Rage

TSMC has more than 50% market share and is by far the biggest chip producer in the word. Basically more than 50% of all chips come from Taiwan. This is bullshit. A crucial commodity like that shouldn't be this centralized in the world limited to mostly one large company. Other countries should really start invensting heavily in their own chip production, if you ask me.
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