Taiwan Semiconductor Manufacturing Co (TSMC) said it is doing all it can to increase productivity and alleviate a worldwide chip shortage, but that tight supplies will likely continue into next year.
The world’s biggest contract chipmaker said it is expanding capacity and working to keep pricing reasonable, Reuters reported.
“We have acquired land and equipment, and started the construction of new facilities. We are hiring thousands of employees and expanding our capacity at multiple sites,” Chief Executive Officer C. C. Wei told an online earnings briefing.
The chip shortage is going to take a couple of years to abate, Intel CEO Pat Gelsinger told the Washington Post on Wednesday.
TSMC’s comments come after the firm reported a 19.4 percent rise in first-quarter profit, on strong chip demand amid a global shift to home working.
TSMC, whose clients include Apple and Qualcomm, had flagged multiple years of growth opportunities as the COVID-19 pandemic fuelled demand for advanced chips to power devices such as smartphones and laptops.
Its business was boosted by the chip shortage that initially forced automakers to cut production, but is now also hurting manufacturers of smartphones, laptops and even appliances.
TSMC said it expects the chip shortage for its auto clients to be greatly reduced from the next quarter.
TSMC’s net profit for January-March hit T$139.7 billion ($4.93 billion).
Revenue rose 25.4 percent to a record $12.92 billion, in line with the company’s earlier estimated range of $12.7 billion to $13 billion.
TSMC forecasts second-quarter revenue would be in a range of $12.9 billion to $13.2 billion, compared with $10.38 billion in the same period a year earlier. It also lifted its revenue growth forecast for 2021 to about 20 percent, versus an earlier forecast of a mid-teens percentage.
TSMC said this month it plans to invest $100 billion over the next three years to increase capacity at its plants, days after Intel announced a $20 billion plan to expand its advanced chip making capacity.
Wei said the investment was driven by stronger engagement with more customers on the company’s advanced 5 nanometer node technology as well as its upcoming 3 nanometer node, which is scheduled to enter trial production later this year.
The company also increased capital spending on the production and development of advanced chips to about $30 billion this year, up from a range of $25 billion to $28 billion it forecast in January.
Wei said TSMC is seeing its clients preparing for a higher level of inventory to ensure supply stability due to uncertainties. As a result, TSMC’s capacity will remain tight throughout the year.