TSMC Raises Revenue Outlook

Taiwan Semiconductor Manufacturing Company (TSMC)(2330-TW)(TSM-US) announced a record-high net income for the first quarter during a press conference on April 14. 

The company also forecasted second-quarter revenue of US$17.6-18.2 billion, up 0.11-3.59% quarter on quarter, with a median estimate of US$17.9 billion, up 1.8% quarter on quarter (QoQ). 

TSMC expects to set another record high revenue due to proper expense control and the depreciation of the New Taiwan dollar, with double-digit rate growth higher than last quarter’s forecast range. 

TSMC’s second-quarter financial forecast is based on US$1 to NT$28.8. The exchange rate is estimated to depreciate from the previous quarter’s NT$27.95. The quarterly revenue is estimated to reach US$17.6-18.2 billion, up 0.11-3.59% QoQ. 

The second quarter was driven by high-performance computing (HPC) and automotive demand, offsetting some of the seasonal factors of smartphones and driving revenue upward. 

According to TSMC chief executive officer C. C. Wei (魏哲家), the supply chain inventory is expected to remain high due to the impact of the epidemic on the supply chain and the overall geopolitical situation.  

However, overall semiconductor demand will benefit from 5G and HPC drivers in the long run. The semiconductor content of various products will increase, putting TSMC in an excellent position to grasp growth opportunities. 

Wei reiterated that TSMC’s production capacity will be tight until 2022, and the outlook of 24-29% annual growth in USD revenue for the year remains unchanged. 

However, he warned that there are many challenges in the supply chain. TSMC will continue to work closely with suppliers and cooperate with customers to help them solve the problem of chip shortage, he explained. 

TSMC’s first-quarter revenue reached US$17.57 billion, up 11.6% QoQ and 36% year on year (YoY), benefiting from solid demand for HPC and automotive applications. The gross margin was 55.6%, up 2.9 percentage points QoQ and 3.2 percentage points YoY, beating the 55% target in the financial forecast. 

Net income after tax was NT$202.73 billion, up 22% QoQ and 45.1% YoY, and net income per share was NT$7.82.