October 8–Taiwanese Manufacturing Company (TSMC) grew its business by 21.6 percent in the third quarter of 2020. The chipmaker’s record-high sales last month helped it beat its revenue guidance for the September period.
Following two consecutive quarters of historic growth, the corporation also intends to increase its capital expenditures for the year.
The Factors Fueling TSMC’s Impressive Growth
Based on its monthly regulatory filings, TSMC made NT$356.4 billion ($12.4 billion) in Q3 2020 versus a comparatively modest NT$293 billion ($10.2 billion) in Q3 2019.
The pure-play foundry anticipated making between NT$320.9 billion ($11.2 billion) to NT$329.5 billion ($11.5 billion) in the quarter prior. But its September revenue – NT$127.59 billion (US$4.44 billion) – pushed its quarterly gross income past its internal expectations.
TSMC’s Q3 growth is undeniably impressive but not at all surprising.
At present, the corporation has the industry’s most advanced semiconductor manufacturing processes. The company’s capability to fabricate leading-edge electronic components prompted Apple and AMD to increase their chip orders. Its next-generation production resources also won new contracts from Tesla and Intel.
Innovation Requires Investment
TSMC hopes to solidify its market position by directing its record revenues into expanding its manufacturing capacity.
DigiTimes reports the contract chipmaker plans to increase its 2020 capital expenditure once again. In July, the firm bumped its annual spending target up from $16 billion to $17 billion. The corporation said its yearly outlay would be between $15 billion and $16 billion in January.
The company has not yet publicly disclosed its new expenditure goal, but will likely announce one next week when it publishes its Q4 outlook.
In the September period, TSMC revealed plans to open several new manufacturing facilities in its home country. The firm purchased a land plot in Hsinchu this summer as a site for its dedicated 2nm wafer plant. It also bought several factories in Southern Taiwan to transform them into 3nm and 5nm production complexes.
TSMC also floated the idea of building a second dedicated 2nm node foundry if demand warrants its construction.
The corporation commenced construction on a 3nm fab in Taiwan in October 2019 and pledged to open a $12 billion facility in Arizona this spring.
Given the intense demand for its services and robust revenue stream, TSMC’s production capacity expansion is unlikely to slow down next year.