Shares of Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday edged toward fresh highs after raising growth projections and unveiling record spending, underscoring expectations the voracious demand that fueled a global chip crunch will persist.
The world’s largest foundry jumped as much as 1.8 percent, boosting the benchmark TAIEX.
Apple Inc’s most important chipmaker is now projecting average sales growth of 15 to 20 percent annually — as much as double its previous expectation.
It intends to spend US$40 billion to US$44 billion expanding and upgrading capacity this year.
Those numbers affirm TSMC’s pole position in the market during an unprecedented chip shortage triggered by the COVID-19 pandemic, a deficit that has badly affected the production of vehicles, mobile phones and game consoles.
It is spending heavily to maintain its technological lead over firms from Intel Corp to Samsung Electronics Co, safeguarding its market share as the growing number of connected devices drive data centers and high-end computing.
TSMC has been running at near-full capacity over the past year and is now investing heavily in new fabs from Taiwan to Japan and the US.
TSMC’s spending target for this year is up at least US$10 billion from last year and more than 43 percent higher than the US$25 billion to US$28 billion Intel has set aside this year to regain its once-dominant position.
The squeeze has been most notable in industries including automaking, wiping out an estimated US$200 billion in sales for automakers such as Volkswagen AG and General Motors Co last year.
Even Apple, TSMC’s top customer, has not been spared.
The iPhone maker said it lost US$6 billion in sales due to component shortages in the three months ended in September, while losses stemming from product constraints are expected to exceed US$6 billion in the holiday quarter.
Although an earlier share rally stalled after setting a record early last year — due to fallout from supply-chain issues — the Taiwanese chipmaker still delivered an annual gain of 16 percent.
Its market capitalization has surged to NT$17.4 trillion (US$629.89 billion), surpassing that of Tencent Holdings Ltd (騰訊) to make it Asia’s most valuable company.
TSMC is “well positioned” in the industry and has room for further price increases in the years to come, Randy Abrams, managing director and head of Taiwan equity research at Credit Suisse Group AG, said in a Bloomberg Television interview.
DISMAL OUTLOOK: A Citigroup analyst predicted firms face ‘the worst semiconductor downturn in at least a decade,’ due to inventory build and the potential of a recession Semiconductor stocks tumbled after Micron Technology Inc became the latest chipmaker to warn about slowing demand, triggering concern that the industry is heading into a painful downturn. In the US on Tuesday, the Philadelphia semiconductor index sank 4.6 percent, with all 30 members in the red, its biggest drop in about two months. In Asia, chip stocks from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to Samsung Electronics Co, SK Hynix Inc and Tokyo Electron Ltd slumped. Investors are growing increasingly skittish as the notoriously cyclical industry is hurtling toward a prolonged slump after years of widespread shortages that led to heavy
With a tantalizing array of satay chicken, wok-fried mud crab and chilled tiger prawns, the dinner buffet at Singapore’s Grand Hyatt hotel typically sets diners back about US$70. Those on a tighter budget and with an eye on sustainability can fill a box for one-tenth of that price. Across Asia, tech start-ups are taking food otherwise destined for landfill and providing discounted meals through mobile phone apps. About one-third of food is lost or wasted every year globally, and the mountains of waste are estimated to cause 8 to 10 percent of greenhouse gas emissions such as methane, the UN says.
MAJOR REVENUE CONTRIBUTOR: The company said that it expects revenue this year to increase annually due to an improved smart consumer electronics outlook Hon Hai Precision Industry Co (鴻海精密) yesterday said revenue this quarter would be flat from last quarter, despite new phone models launched by key customers, as the market faces weakening demand. The iPhone assembler, based in New Taipei City’s Tucheng District (土城), said it is cautious about its business outlook, given mounting uncertainty regarding geopolitical tensions, soaring inflation and COVID-19 flare-ups, but still expects revenue this quarter to be higher than the NT$1.4 trillion (US$46.67 billion) it reported a year earlier. The forecast came as the company posted record second-quarter net profit of NT$33.29 billion, up 12 percent year-on-year from NT$29.78 billion.
Yageo Corp (國巨) yesterday said that its revenue would drop by a low single-digit percentage this quarter from a historical high last quarter, as customers and distributors are holding back demand to concentrate on inventory digestion due to flagging smartphone and notebook computer demand. The world’s biggest supplier of passive components expects to take three to six months to reduce its inventory of commoditized passive components to a normal level of 100 to 110 days, from 130 days currently. Yageo would reduce its factory utilization rate for standard passive components to about 60 percent this quarter, from about 70 percent last quarter,
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