TSMC "Forecasts 30% Revenue Growth This Year"…Confidence Despite Economic Uncertainty

by Jeong Hyunjin

Published 08 Jun.2022 15:09(KST)

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Taiwan's TSMC forecasted that its sales growth rate this year will reach 30%, surpassing last year's 24.9%. Despite increasing uncertainties in the global economy, including the Ukraine war and soaring inflation, semiconductor demand is expected to remain robust.

According to Bloomberg on the 8th, TSMC Chairman Liu Deyin said at the annual shareholders' meeting, "The current inflation does not have a direct impact on the semiconductor industry." He explained, "The demand decline mainly occurs in consumer devices such as smartphones and PCs, but demand for electric vehicles (EVs) is very strong, and some exceed our supply capacity, leading to inventory adjustments. Our factory operation reservations are already fully booked for this year."

TSMC reaffirmed that its sales in the second quarter of this year will reach the previously forecasted $17.6 billion to $18.2 billion (approximately 22 trillion to 22.8 trillion KRW), and stated that the gross profit margin will reach 58%. Bloomberg reported, "TSMC's forecast comes amid concerns that demand for electronic devices will decline due to inflation, the Ukraine war, and the impact of China's lockdowns."

TSMC has budgeted $40 billion to $44 billion for capital expenditures this year and plans to invest more than $40 billion in capital expenditures next year as well. Chairman Liu mentioned that although the semiconductor manufacturing support bill has not yet passed in the U.S. Congress, the construction of the new plant in Arizona will proceed as planned, and while costs will increase, they are manageable. Regarding speculation about building a plant in Europe, he said it is true that they are reviewing it, but there are no concrete plans at this time.