TSMC shares soar on earnings estimates and Japan factory deal, Auto News, ET Auto



With much of TSMC’s production concentrated in Taiwan, many countries have courted the company to build foundries in their territories.

Taipei – Shares of Taiwanese chip giant TSMC soared on Friday, posting better-than-expected profits for the rest of the year and following news of plans to build its first plant in Japan.

The world is plagued by a severe shortage of silicon chips that are used in everything from cars and missiles to phones and game consoles.

Taiwan Semiconductor Manufacturing Company (TSMC) operates the world’s largest silicon wafer factories and produces some of the smallest and most advanced microchips.

On Thursday, the tech giant said it expected fourth-quarter revenue of $ 15.7 billion, higher than analysts’ estimates, as demand for chips remained strong.

Third-quarter net income rose 14%, beating expectations, to $ 5.6 billion.

The news was music to investors’ ears, with TSMC’s stock price rising more than 4.5% in morning trading in Taipei.

TSMC’s factories are already operating at full capacity and the company has warned that production will likely remain stretched next year.

“We expect TSMC’s capacity to remain very tight in 2021 and throughout 2022,” Managing Director CC Wei said on a conference call.

“While short-term imbalances may or may not persist, we believe our technological leadership will enable TSMC to capture the strong demand for our advanced and specialized technologies,” he added.

With much of TSMC’s production concentrated in Taiwan, many countries have courted the company to build foundries in their territories.

The company has already pumped billions into building a state-of-the-art foundry in Arizona and announced Thursday that it will build its first plant in Japan.

Work will begin next year and is partly funded by the Japanese government with the expectation that the plant will start producing chips by the end of 2024.

Japanese Prime Minister Fumio Kishida said Thursday evening at a press conference that the agreement “would improve the independence of our country’s semiconductor industry and significantly contribute to our economic security.”

“We will add support for TSMC’s large-scale private investment to our economic plans,” Kishida added.

Japanese daily Asahi said on Friday that the Japanese government was considering financial support of around 500 billion yen ($ 4.4 billion) for the factory project.

Aid will likely be part of the supplementary budget for this fiscal year, the newspaper said, adding that companies such as Sony and auto parts maker Denso could cooperate with TSMC’s operations in Japan.

July-September net profit for TSMC, the world’s largest contract chip maker and a key supplier to Apple Inc, was $ 156.3 billion ($ 5.56 billion), although above the $ 149 billion average of 22 analyst estimates compiled by Refinitiv.


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