Taiwan chip giant sees 20 per cent revenue spike as industry struggles to meet demand
Capital piles into chip fabs as pandemic recovery pushes demand
Chip giant Taiwan Semiconductor Manufacturing Co has seen quarterly revenue hit NT$372.1bn ($13.3bn), nearly 20 per cent up from a year earlier as the manufacturer struggles to cope with mountainous demand in the pandemic recovery.
The chip giant releases monthly revenue figures which have been collated by The Register and other outlets, including Bloomberg. TSMC will host a second quarter 2021 earnings conference on Thursday next week - July 15. The firm is currently in a quiet period.
TSMC, which is the world’s largest contract chip maker, ditched its price cut policy (up to 3 per cent) for major customers earlier this year against a backdrop of ongoing shortages.
The world has been gripped by a semiconductor shortage due to the COVID-19 pandemic. The squeeze was due to restrained supply, caused by lockdowns in China, Taiwan and other parts of the Far East, combined with a spike in demand for laptops and other home working equipment.
As economies opened up, demand in consumer electronics and the automotive sector also increased. Daimler AG and Jaguar Land Rover have suggested that sales might be hit by the persistent chip shortage.
Manufacturers like TSMC are investing to meet demand. In May, well over half a trillion dollars of capital was committed to semiconductor fabrication, with $450bn from Samsung, around $130bn in President Biden's massive infrastructure spend, and another $100bn from TSMC.
According to analyst IC Insights, sales of the top 15 semiconductor companies increased by 21 per cent year-over-year in Q1 2021. The ranking included six fabless companies (Qualcomm, Broadcom, Nvidia, MediaTek, AMD, and Apple), and TSMC as the only pure-play foundry player.
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Meanwhile, New York-based GlobalFoundries is breaking ground on a new $4bn Singapore facility that will produce chips for legacy nodes. The company said it expects the facility to be fully operational by the end of 2023, and producing in the region of 450,000 300mm wafers annually. This would bring its total Singapore output to 1.5 million wafers a year.
AMD has also said it would invest $1.6bn in 12nm and 14nm chips from GlobalFoundries between now and the end of 2024.
Yet the greatest impact of the ongoing pandemic remains in the Taiwan chip sector. Last month, the world’s leading provider of chip-testing services, Taiwan’s King Yuan Electronics (KYEC), suspended production for two days due to a COVID-19 outbreak among the company’s foreign workers. ®