This week, Taiwan Semiconductor Manufacturing Company (TSMC) presented its preliminary results report for the first quarter of 2022. In February, the world’s largest semiconductor foundry reported sales of NT$146.9 billion (about $5.2 billion).
This is the company’s highest-ever sales total for February, and while it’s down 15% month over a month when compared to January, it’s up 38% when compared to the same period last year. The change from January is primarily due to downtime associated with the Lunar New Year holiday, which lasted a week.
TSMC reported total sales of NT$319.1 billion in the first two months of 2022, up 36.8% from the same period last year. Because the company anticipates an increase in sales this month, it has revised its revenue forecast for the first quarter to a range of $16.6 billion to $17.2 billion.
The company has had a solid financial performance in the last two years, thanks to the increasing demand for chips built on advanced manufacturing nodes. TSMC announced earlier this year that it would spend somewhere between $40 billion and $44 billion in 2022 to upgrade its production capacity.
Apple continues to be TSMC’s largest customer, accounting for roughly 26% of the company’s revenue. Apple’s M1 Ultra chipset, which was recently introduced, is the product of a deeper partnership with TSMC, which included the latter’s 4nm process node as well as its sophisticated 2.5D chip-on-wafer-on-substrate with silicon interposer (CoWoS-S) technology.
Nvidia is claimed to have spent $10 billion on a substantial portion of its 5nm capacity, giving the foundry cause to be bullish about the future. Qualcomm plans to use its 3nm production node in future Snapdragon 8-series CPUs, which seems good.
TSMC has decided to raise wafer costs for its 7nm and 5nm manufacturing nodes this year, and if history is any guide, Apple will see the least price increase. Starting in Q3 2022, other companies will see pricing increases ranging from 10% to 20%.
Fortunately, this is also when Nvidia and AMD’s AIB partners predict a 10% rise in graphics card shipments, so the wafer price increase may not have a significant impact on GPU retail prices. In any case, TSMC is upbeat about its prospects, expecting sales to increase by 25 to 29 per cent in 2022 compared to last year.
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