TSMC's 3NM chipset to launch by 2023 and 2NM chipset production to start by 2025
TSMC's 3NM chipset to launch by 2023 and 2NM chipset production to start by 2025 Image Credits: GizmoChina

TSMC shares surge as profit increase more than estimated

The shares of TSMC (Taiwan Semiconductor Manufacturing Company, Limited) jumped nearly 3.7% on Friday as the semiconductor manufacturing giant announced profit numbers.

From 477.00 at the opening of Taiwan Stock exchange, stocks of TSMC rose by 17.5 points (3.68%) to post a stock price of 492.50 at the end of trading on Friday.

According to media reports, TSMC posted a 76.4% growth in profit in the period April to June 2022. In dollar terms, TSMC posted a profit of 7.92 billion dollars.

This amount is higher than what was expected from the forecast announced by various economic agencies.

According to profit and income numbers released, projected income and sales growth in the 3rd quarter ending in September 2022 is expected to be higher than earlier forecasts.

Income for the September quarter is expected to be between 19.8 billion and 20.6 billion dollars. Earlier income forecast for that quarter was 18.5 billion dollars.

During the April-June period, the revenue of the world’s largest chipmaker increased by 44% while the gross margin is now at the highest level in the last 26 years.

Reports also suggest that most of TSMC’s business comes about from American tech giant Apple and similar smartphone manufacturers. Growing demand for semiconductors for automobile manufacturing also assisted the company in posting huge growth in profit, revenue, and margins.

Why TSMC financials are a piece of good news?

Since the beginning of the pandemic two years ago and the Russia – Ukraine conflict, tech companies were facing heat of inflationary effects and volatile demand and supply of companies.

Various smartphone and software businesses such as Google, Microsoft, and Tesla saw a reduction in demand for their services and products, which led to fears among the semiconductor industry about a possible reduction in demand.

Now with high profits from TSMC and optimistic sales and growth projections by TSMC and various rating agencies, the tech industry is expected to stand up back on its feet for the first time since the beginning of the pandemic.

There are also various reports regarding plans of entities such as Apple, AMD, and Nvidia to decrease orders from TSMC in order to keep up with the declining customer demands.

According to Mark Liu, Chairman of Taiwan Semiconductor Manufacturing Company, Limited, pandemic, and war-induced inflation did not have any huge direct impact on the chipmaker. While consumer tech such as phones and computer devices saw a declining demand among the customer base, EV demand stayed very strong.

He also added that the rate of utilization is full for the rest of the year at the company.