Taiwanese chip giant TSMC forecast revenue growth that could be the highest in 10 quarters, saying it was “highly confident” about its long-term prospects and touted demand for high-tech chips used in data centres and electric vehicles. The outlook from the world’s largest contract chipmaker follows blow-out results for the April-June period that underscored resilient demand amid a chip crunch caused by pandemic-fuelled sales of smartphones and laptops.
TSMC is a major supplier for Apple Inc and the results are also a testament to demand for the iPhone 13 despite record global inflation and worries of a looming recession. They are likely to ease some worries after several chipmakers, including Micron Technology Inc recently sounded the alarm that chip shortages turned it a glut in some sectors, as soaring inflation and China’s COVID-19 curbs have squashed demand for electronics. The results helped European chip stocks including STMicroelectronics, and Infineon, buck a fall in the pan-European STOXX 600 index.
TSMC, whose clients include chip majors such as Qualcomm Inc, also signalled that demand was cooling from consumer electronics customers who would reduce chip stockpiles over the next few quarters into 2023.
“After two years of pandemic-driven stay-home demand, this type of adjustment is reasonable in our view,” TSMC’s Chief Executive Officer C C Wei told an online earnings briefing. But he said that long-term demand for TSMC’s chips was “firmly in place” and any upcoming down cycle would not be as big as in 2008. “Despite ongoing inventory adjustment and macro uncertainties, the structural growth trajectory in the long-term semiconductor demand remains firm. We expect our capacity to remain tight and our business to be more resilient.”
Other chipmakers such as Samsung Electronics have also highlighted demand from data-centre customers.
TSMC’s net profit for April-June rose to a record T$237.0 billion ($7.94 billion), above the T$219.13 billion average of 19 analyst estimates.