Taiwan Semiconductor Manufacturing Company saw sales soar in the first quarter, partly due to increased average chip prices as the chip shortage continues.
TSMC said Friday it posted consolidated sales of NT$491.08 billion (nearly $17 billion US) up by 35% from the same period in 2021. Strong demand for high performance computing devices and auto electronics helped, even as the first quarter is traditionally a slow one, analysts said.
TSMC is the world’s largest contract chipmaker. TSMC produces chips used in Apple products and is expected to win orders for Apple’s own 5G modem design for the next iPhone lineup.
The chip shortage has helped chipmaker revenues broadly and that includes TSMC. In 2021, limited chip supplies led to higher prices, resulting in revenues of $586.8 billion, up 24% from 2020.
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TSMC did not reveal the volume of chips delivered in the first quarter, but it did increase quoted prices in August by 10% on N5 and N7 nodes and by 20% on its N16 and thicker nodes for orders set to be fulfilled in December, according to Tom’s Hardware. N5 and N7 tech make up about half of TSMC revenues.
TSMC will give a full earnings report later in March, at which point analysts are hoping to learn more about the company's inventory strategy on materials such as silicon wafers and industrial gases, said Bloomberg analyst Charles Shum in a note. The supply picture is "foggy," Shum said, due to rising geopolitical tension and slow gains in wafer capacity.
"TSMC is doing everything possible to optimize, and even increase, manufacturing capacity," said Jim McGregor, principal analyst at Tirias Research in an email to Fierce Electronics. Yields will increase over time, he added.
TSMC's strong revenue growth in Q1 would seem to be mostly due to its product sales mix as it and other companies are responding to the ongoing shortage by "opting to try and produce as many of their high-end products as possible," McGregor said.
Separately, Gartner recently forecast global information tech spending will jump by 4% ion 2022, reaching $4.4 trillion.