TSMC increased its upgrading capacity budget this year to $44 billion after recording record profits. With that, the demand for chips has increased, but TSMC has still been struggling to keep up.
TSMC Plans to Increase Budget to $44 Billion per Year
Despite the global chip shortage being hard for consumers, it was not the same for the business side of things. With that, TSMC was in a very advantageous position, and despite jacking up its production, it was still not enough to meet demand.
According to the story by TechSpot, TSMC reported record quarterly profits with raised growth projects while announcing that they would be spending $40 billion to $44 billion when it comes to upgrading its capacity this year.
Q4 2021 Demands Increased by 24.1% to $15.74 Billion
The demand for components actually means that chip manufacturers are full of orders and still struggling to meet demands. TSMC's revenue shot up by 24.1% to $15.74 billion in Q4 2021, with its net profits jumping to $6.01 billion from just over $5.2 billion a year earlier, which ultimately beat expectations from analysts.
The company is expected to have a healthy Q1 2022 with a prediction of $16.6 billion to $17.2 billion in sales during the first quarter which is at least 5% higher than estimates. To add, it currently looks like TSMC doesn't envision demand for chips to start slowing down over the course of the next few years.
TSMC Chief Executive Expects Multi-Year Industry Megatrend
The company noted that it plans to invest heavily in new fabs spread across different regions spending $40 billion to $44 billion, expanding its total upgrading capacity this year. In a report on Bloomberg the figure is up by $10 billion more compared to its spendings last year and 43% higher compared to the $25 billion to $28 billion budget of Intel for its chip manufacturing.
C. C. Wei, TSMC Chief Executive, told an online briefing, as reported on Reuters, that the chipmaker will be entering a period of higher structural growth. To add, the company is expecting the "multi-year industry megatrend" of massive demand for chips to be boosted by new technologies.
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Global Chip Shortage Affects Different Tech Products
The executive also noted that the new "megatrend" has even raised its annual growth targets from just 10%-15% to 15%-20%. To add, Wei noted that any risk of oversupply would be mitigated by the increase in demand for tech products like the rising electric car market.
Wei notes that should a correction happen. The company believed that it would still be less volatile for TSMC due to their technology leadership position as well as the structural megatrend. Besides, the chip shortage has affected the prices and availability of numerous tech products like GPUs, SSD controllers, DDR5 RAM, consoles, laptops, vehicles, smartwatches, smartphones, audio devices, other computer parts, and even common household appliances.
This article is owned by Tech Times
Written by Urian B.
