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.
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