Taiwan Semiconductor Mfg. Co. Ltd. (NYSE:TSM) Topline Rises 21.2%

Taiwan Semiconductor Mfg. Co. Ltd. (NYSE:TSM), the world’s biggest contract chipmaker and a lead supplier for Apple, stock rose 2.92% (As on Jan 14, 11:27:07 AM UTC-4, Source: Google Finance) after the company’s Year-over-year, fourth quarter revenue increased 21.2% while net income and diluted EPS both increased 16.4%. Compared to third quarter 2021, fourth quarter results represented a 5.7% increase in revenue and a 6.4% increase in net income. In US dollars, fourth quarter revenue was $15.74 billion, which increased 24.1% year-over-year and increased 5.8% from the previous quarter. Gross margin for the quarter was 52.7%, operating margin was 41.7%, and net profit margin was 37.9%. In the fourth quarter, shipments of 5-nanometer accounted for 23% of total wafer revenue; 7-nanometer accounted for 27%. Advanced technologies, defined as 7-nanometer and more advanced technologies, accounted for 50% of total wafer revenue. The fourth quarter business was supported by strong demand for the industry-leading 5-nanometer technology.

For first quarter 2022, the revenue is expected to be between US$16.6 billion and US$17.2 billion. And, based on the exchange rate assumption of 1 US dollar to 27.6 NT dollars, gross profit margin is expected to be between 53% and 55% and Operating profit margin is expected to be between 42% and 44%. Moving into first quarter 2022, the company expects the business to be supported by HPC-related demand, continued recovery in the automotive segment, and a milder smartphone seasonality than in recent years

The management further expects the 2022 capital budget to be between US$40 billion and US$44 billion, a 33% increase from 2021 levels, and doubled its compound annual growth rate targets for revenue to between 15% and 20% amid what it called a “multi-year industry megatrend” for global semiconductor demand.

Meanwhile, the company has recently introduced its N4X process technology, tailored for the demanding workloads of high performance computing (HPC) products. N4X is the first of TSMC’s HPC-focused technology offerings, representing ultimate performance and maximum clock frequencies in the 5-nanometer family. The “X” designation is reserved for TSMC technologies that are developed specifically for HPC products. Leveraging its experience in 5nm volume production, TSMC further enhanced its technology with features ideal for high performance computing products to create N4X. These HPC features will enable N4X to offer a performance boost of up to 15% over N5, or up to 4% over the even faster N4P at 1.2 volt. N4X can achieve drive voltages beyond 1.2 volt and deliver additional performance.

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