Tech

TSMC had a record month in February and is gearing up for a record year

In short: TSMC has just had its best month in terms of sales and it looks like 2022 could be its best year as well. High demand for GPUs, processors, consoles and phones has been a boon for foundries like TSMC, which are using it to expand capacity in Taiwan, Japan and the US.

Taiwan Semiconductor Manufacturing Company (TSMC) released its preliminary earnings report for the first quarter of 2022 this week. The world’s largest semiconductor foundry said it had sales of NT$146.9 billion (about $5.2 billion) in February.

This is the company’s highest recorded revenue for February, and while down 15% m/m from January, it represents a 38% increase year-over-year. The difference from January is mainly due to downtime associated with the week-long lunar New Year’s holiday.

TSMC reports total sales of NT$319.1 billion in the first two months of 2022, up 36.8% from last year. The company expects sales growth this month, so it adjusted its revenue forecast to reflect a $16.6 billion to $17.2 billion goal for the first quarter.

Over the past two years, the company has delivered strong financial performance on the back of relentless demand for chips manufactured at its advanced technology nodes. Earlier this year, TSMC promised it would spend between $40 billion and $44 billion to upgrade its manufacturing facilities in 2022.

Apple remains TSMC’s biggest customer, with an estimated 26 percent of its revenue coming from the Cupertino giant. Apple’s recently announced M1 Ultra chipset is the result of a closer collaboration with TSMC, including the latter’s 4nm process node as well as its advanced 2.5D silicon-on-wafer-on-substrate (CoWoS-S) technology.

The foundry has plenty of reason to be optimistic about the future, as Nvidia is said to have spent $10 billion on most of its 5nm capacity. Its 3nm process node also looks promising, and Qualcomm plans to use it for future Snapdragon 8-series chips.

This year, TSMC has decided to increase wafer prices for its 7nm and 5nm processes, and based on history, Apple is likely to receive the smallest price increase. Other companies will see a 10-20% price increase starting in the third quarter of 2022.

Thankfully, this is the time Nvidia and AMD’s AIB partners are expecting to see a 10% increase in graphics card shipments, so it’s possible that substrate price hikes won’t have a noticeable impact on GPU retail prices. In any case, TSMC is optimistic about its prospects and expects its sales in 2022 to grow by 25-29 percent compared to last year.


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