Taiwanese foundry giant TSMC can't make enough chips for its customers, but that isn't stopping the company from making bank on the silicon it can churn out.
The contract chip manufacturer, which counts Apple, Nvidia and AMD as major customers, reported on Thursday that its revenue in the first quarter grew 36 percent year-over-year to $17.6 billion. The company estimated sales will continue growing at similar rate next quarter.
TSMC expects second-quarter revenue to be in the range of $17.6 billion to $18.2 billion, a small increase from the first quarter but a much larger 36.9 percent boost on the high end when compared to the same period last year. Even the company's conservative estimate for the second quarter would mark a year-over-year increase of 32.4 percent.
The Taiwanese chip giant said this forecast is based on continued growth from the automotive and high performance computing segments, the latter of which includes CPUs and GPUs for everything from PCs and servers to tablets and game consoles. Wafer sales for smartphone chips, on the other hand, are expected to fall because of the segment's seasonality.
This high demand in automotive and HPC is what allowed TSMC to grow so much in the first quarter. As a result, 50 percent of its first-quarter revenue came from its leading-edge manufacturing nodes, split between 20 percent for 5nm and 30 percent for 7nm-process nodes.
In an earnings call Thursday morning, TSMC CEO CC Wei admitted that the chipmaker still can't make enough wafers for all customers as production capacity continues to be tight.
One major reason is that impacts from the pandemic, past and continuing, continue to constrain the availability of labor, components and chips from its suppliers, according to Wei. This includes chip-making equipment providers that have suffered from delivery issues at earlier this year.
TSMC's high sales growth isn't surprising. Demand for chips persists, even if that demand isn't uniform across every segment. This has allowed foundries like TSMC to raise the prices of wafers, which, in turn, have boosted their revenues, according to a March report by Taiwanese research firm TrendForce.
Regardless, TSMC's Wall Street-pleasing numbers underline the beneficial position the chipmaker has found itself in. It's also why rival Intel is so keen on revitalizing its foundry business with new factories in the US and Europe to lower the world's reliance on chip manufacturing in Asia. ®
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