TSMC beats tech slump with 50% revenue rise

midian182

Posts: 8,472   +104
Staff member
In brief: We're in the middle of a global economic slowdown that has hit tech companies especially hard, but it seems nobody told TSMC. The world's largest contract chipmaker saw its November revenue increase 50.2% year-on-year to reach $7.27 billion, and a lot of it was thanks to Apple.

Falling demand, China's Covid Zero policies, the rising cost of living, and recession fears have made 2022 a bad year for tech giants. Demand for everything from smartphones to PCs has fallen, and mass layoffs have become a regular sight.

TSMC has bucked the trend by more than doubling its sales in November—compared to a year earlier—reaching $7.27 billion. That puts the company on track to hit its fourth-quarter estimate of between $19.9 billion and $20.7 billion.

Much of TSMC's good quarter came from supplying the A16 SoC used in the iPhone 14 Pro and 14 Pro Max. Apple, already TSMC's biggest customer, said last month that it would purchase chips from the supplier's US facilities, lessening Cupertino's reliance on Asia. We also heard that the Taiwanese giant will begin manufacturing on a 4nm process in its Arizona fabs in 2024—an upgrade from the previously planned 5nm wafers—following a decision that was reportedly encouraged by Apple.

Some analysts wonder whether TSMC will be able to keep its run of good fortune going next year when orders could decline. However, the company reportedly plans to raise 3nm wafer prices by 25 percent over 5nm to $20,000, which should boost its bottom line. The 2023 iPhone 15's A17 Bionic chip will be manufactured on the 3nm process, and Apple has already agreed, albeit reluctantly, to TSMC's price hike.

At an event attended by Joe Biden earlier this week, TSMC confirmed it would expand its building and manufacturing efforts within the US. The expansion will see $40 billion spent on two fabs in Arizona, an increase from the previously planned $12 billion investment. The site will create tens of thousands of jobs and have a total manufacturing output of 600,000 wafers per year.

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Uncle Al

Posts: 9,363   +8,581
According to earlier articles, to build and start a chip factory (to 100% functionality) takes between 8-10 years. It can begin producing chips as early as 4-5 years but those are simpler and don't represent the capabilities of the full scale version (according to WSJ).
 

Rq3EWAq

Posts: 168   +165
TSMC shares actually fallen -30% year to date. They pay quarterly dividends, but that still not prevented the sell-off.
 

Thatsdisgusting

Posts: 102   +151
According to earlier articles, to build and start a chip factory (to 100% functionality) takes between 8-10 years. It can begin producing chips as early as 4-5 years but those are simpler and don't represent the capabilities of the full scale version (according to WSJ).
imtportant notes on this one - what do we count as construction, is it starting from negotiations to full capacity production or only basin to construction end part, how much more they want to invest funds and work done to hurry up the stuff (because of china), and thus what failure rate they suggest acceptable.

 

Uncle Al

Posts: 9,363   +8,581
imtportant notes on this one - what do we count as construction, is it starting from negotiations to full capacity production or only basin to construction end part, how much more they want to invest funds and work done to hurry up the stuff (because of china), and thus what failure rate they suggest acceptable.

Oh, those earlier figures do NOT include training staff, but since that is usually accomplished during the later part of the construction phase, it doesn't add onto the time line. What can add on is the very specialized training, especially for senior engineers. That gets measured in years .....
 

Thatsdisgusting

Posts: 102   +151
Oh, those earlier figures do NOT include training staff, but since that is usually accomplished during the later part of the construction phase, it doesn't add onto the time line. What can add on is the very specialized training, especially for senior engineers. That gets measured in years .....
That could mean 2 years vs 8 years before meaningfull output from factory. Critical diff, suggesting ties with china broke already, even worse, war is going to outbreak anytime now - without Taiwan, but some slow wall of fire in Pacific, and that still has an impact on Taiwan and kicks out China.
As for engineers - seems like they are ready to "strip TSMC" for some, other part provided by Intel, judging from their activity on "home fab front". Add to that green and young who are graduating 2020-2024 - voila, you have ensured you'll have chips production in deep rear.