Impact of Soaring Chip Demand, TSMC Reports Revenue Up 20 Percent In Q2 2021

TSMC is often used for Apple products and other technology companies including cars. (photo: Infralist/Unsplash)

JAKARTA - Chipset maker Taiwan Semiconductor Manufacturing Company (TSMC), has just reported an increase in the company's revenue for the second quarter of 20 percent.

For the period from April to June, TSMC received 13.3 billion US dollars. Most analysts expect revenue for June alone to be 5.28 billion dollars, a 23 percent increase over June last year. It is known, TSMC is often used for Apple products and other technology companies including cars.

Citi analysts noted that the chip shortage increased TSMC's price, allowing the company to make up for the money spent on new plants, including a $12 billion facility under construction in Phoenix, Arizona.

The company's breakthrough technology in EUV (extreme ultraviolet lithography) gives it a huge advantage over others. EUV lithography uses ultraviolet waves to mark wafers with circuit patterns for transistor placement.

Meanwhile, market analysts Roland Shu and Grant Chi said TSMC's ability to influence prices and global capacity shortages offset the high capital investment the company needed to grow.

The pandemic has led to a serious chip shortage affecting the availability of chips for smartphones, tablets, and cars. Earlier this week, Daimler AG and Jaguar Land Rover warned that sales would continue to be limited due to a continuing chip shortage and that second-quarter shipments would be 50 percent less than originally planned.

However, TSMC's smaller chipmaker United Microelectronics Corp said demand for chips will continue to exceed supply through 2023. That's good news for companies like TSMC which have reportedly started production on Apple's sequel chip, the M1.

The M1 chip itself is manufactured using TSMC's 5nm fabrication, is packed with 16 billion transistors, and is used in devices such as the Mac and iPad Pro (2021).

Last month news broke that TSMC plans to start production of 4nm chips next quarter. The next big change is predicted to occur next year when TSMC begins production of chips using its 3nm process node.

For information, although the shortage of chips has affected many industries, car manufacturing has been one of the hardest-hit industries.

At the start of the pandemic, auto sales fell, prompting a decline in chip orders for automotive systems and semiconductor manufacturers scrambled to meet the demand for consumer electronics needed for teleworking and distance learning.