TSMC expects strong chip demand and easing of chip shortage

Speaking to analysts TSMC has said that it expects the automotive chip shortage will gradually ease from this quarter but has warned that overall Semiconductor capacity tightness is likely to extend well into next year.

The outlook from TSMC came as it posted record quarterly sales and forecasted record revenues for the current quarter – up by around 20 per cent – which have been boosted by a surge in global demand for semiconductors that power smartphones, laptops and cars.

During the April-June reporting period TSMC, the world’s largest contract chipmaker, saw revenues climb 28% to a record $13.29 billion and it is forecasting revenue of $14.6 billion to $14.9 billion for the next quarter, compared with $12.1 billion in the same period a year earlier.

“Our second-quarter business was mainly driven by continued strength in high performance computing (HPC) and automotive-related demand,” said Chief Financial Officer Wendell Huang.

“Moving into the third quarter, we expect our business to be supported by strong demand for our industry-leading 5 nanometre and 7 nanometre technologies, driven by all four growth platforms, which are smartphone, HPC, IoT and automotive-related applications.”

Profits surged by over 11 per cent in the second quarter to almost $5bn.

These strong results come as the company plans a $100 billion expansion plan over the next three years that looks to address the needs of fifth-generation telecommunications (5G) technology and artificial intelligence applications, which are seen as driving global demand for advanced chips.