TSMC warns of continuing chip shortages

The Taiwan Semiconductor Manufacturing Co (TSMC) has said that while it is doing all it can to increase productivity and alleviate a worldwide chip shortage, tight supplies are expected to continue well into 2022.

The world’s biggest contract chipmaker said it is expanding capacity and working to keep pricing ‘reasonable’.

According to the company’s CEO, C.C. Wei, “We have acquired land and equipment, and started the construction of new facilities. We are hiring thousands of employees and expanding our capacity at multiple sites.”

His comments come after TSMC reported a 19.4% rise in first-quarter profit, beating market expectations. Driven by strong chip demand amid a global shift to home working profits rose to $4.93 billion, while revenues were up 25.4% at $13.92 billion.

Despite concerns TSMC said that it expected the chip shortage for its auto clients to be greatly reduced from the next quarter.

The firm forecast second-quarter revenue would be in a range of $12.9 billion to $13.2 billion, compared with $10.38 billion in the same period a year earlier and it has also lifted its revenue growth forecast for 2021 to about 20%, versus an earlier forecast of a mid-teens percentage.

The company said that it had increased capital spending on the production and development of advanced chips to about $30 billion this year, up from a range of $25 billion to $28 billion it forecast in January. It’s planning to invest $100 billion over the next three years to boost capacity.

TSMC said the massive investment plan was being driven by “stronger engagement with more customers” on its most advanced 5 nanometer node technology as well as its upcoming 3 nanometer node, which is scheduled to enter trial production later this year.