Taiwanese foundry giant TSMC can’t make enough chips for its customers, but that’s not stopping the company from building a bank on silicon can do churn out.
The contract chip maker, which counts Apple, Nvidia and AMD as major customers, reported Thursday that its revenue rose 36 percent year-over-year to $17.6 billion in the first quarter. The company expects sales to continue to grow at a similar rate in the next quarter.
TSMC expects second-quarter revenue to be between $17.6 billion and $18.2 billion, a small increase from the first quarter, but a massive 36.9 percent increase on the high end compared to the same period last year. Even the company’s conservative estimate for the second quarter would put growth at 32.4 percent year-over-year.
The Taiwanese chip giant said its forecast is based on continued growth from the automotive and high-performance computing segments, the latter of which includes CPUs and GPUs for everything from PCs and servers to tablets and game consoles. On the other hand, wafer sales for smartphone chips are expected to fall due to the segment season.
This high demand in automotive and HPC allowed TSMC to grow this much in the first quarter. As a result, 50 percent of its first-quarter revenue came from its leading-edge manufacturing nodes, which is split between 20 percent for 5nm and 30 percent for 7nm-process nodes.
In an earnings call Thursday morning, TSMC CEO CC Wei acknowledged that the chipmaker still can’t make enough wafers for all customers as production capacity remains tight.
One major reason is that the effects of the pandemic, past and continuous, continue to disrupt the availability of labor, components and chips from their suppliers, according to Wei. That includes chip-making equipment providers who suffered from delivery issues earlier this year.
TSMC’s high sales growth isn’t surprising. Chips continue to be in demand, even if that demand is not uniform across segments. According to a March report by Taiwanese research firm Trendforce, this has allowed foundries like TSMC to raise the prices of wafers, which in turn has increased their revenue.
Regardless, TSMC’s Wall Street-pleasing numbers underscore the advantageous position the chipmaker has found itself in. That’s why rival Intel is eager to revive its foundry business with new factories in the US and Europe to reduce the world’s reliance on chip manufacturing in Asia. ,