Taiwan Semiconductor Reports Record Sales, Announces Global Expansion

Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) has reported record quarterly sales and said that it is planning to build new factories in the U.S. and Japan to accommodate a surge in demand for semiconductor microchips that power smartphones, laptops and vehicles.

TSMC posted record quarterly sales and forecast higher revenue for the current quarter. The company also said it will expand production capacity in China and is planning for an expansion at its $12-billion U.S. factory in Arizona.

The world's largest contract chipmaker and a major supplier to consumer electronics giant Apple also said it is reviewing a plan to set up a specialty technology wafer fabrication plant in Japan.

TSMC's overseas expansion plans come amid concern over the concentration of chipmaking capability in Taiwan, which produces most the world's most advanced chips and is geographically close to China, which does not rule out the use of force to bring the democratic island under its control.

Taiwan and TSMC have also become central in efforts to resolve a pandemic-induced global chip shortage that has forced automakers to cut production and hurt manufacturers of smartphones, laptops and even appliances.

TSMC’s revenue for April through June climbed 28% to a record $13.29 billion U.S. For the quarter ending in September, TSMC is forecasting revenue of $14.6 billion U.S. to $14.9 billion U.S., compared with $12.1 billion U.S. in the same period a year earlier.

For the second quarter, TSMC said its profit rose 11% to $4.81 billion U.S. from a year earlier.

TSMC said it expects overall semiconductor capacity tightness to extend into 2022.

TSMC is planning a capacity expansion in China's Nanjing province due to the urgent need of its clients. The China production expansion is scheduled to begin in 2022 and will eventually reach a production of 40,000 wafers per month by mid-2023.

The Taiwanese firm, which also makes chips for Qualcomm, had previously flagged a $100 billion U.S. expansion plan over the next three years, as fifth-generation telecommunications (5G) technology and artificial intelligence (AI) applications drive global demand for advanced chips.

Shares of TSMC have gained about 16% so far this year, giving it a market capitalization of $567 billion U.S., more than double that of rival chipmaker Intel Corp.