By Dhirendra Tripathi
Investing.com – TSMC stock (NYSE:TSM) jumped 8.7% Thursday as the world’s largest chipmaker laid out an ambitious capital spending plan for 2022 to meet surging demand for its chips.
The company said it expects to lift capital spending to between $40 billion and $44 billion this year as demand for chips that go into mobiles, laptops, cameras and other electronic gadgets refuses to abate. The company spent $30 billion last year and has committed $100 billion in investments over the next few years to set up new plants and expand capacities.
High demand, abetted by shortages in a pandemic-struck world, is seen keeping TSMC’s gross profit margin in the current quarter at 54% at the center of its guidance range. Revenue for January through March is seen at $17.2 billion at the top end of the guidance range. For the year, it expects revenue to grow by 15%-20%.
Chipmakers like TSMC, Samsung (KS:005930) and Nvidia (NASDAQ:NVDA) have had the best of times last two years as the pandemic accelerated demand for digital devices and services, boosting both institutional and retail appetite for laptops and mobiles.
According to Reuters, Chief Executive C. C. Wei expects capacity to remain tight this year and demand to be sustained in the long term.
Revenue in the quarter through December climbed 24% to nearly $16 billion. Net profit rose over 15% to $6 billion. Advanced technologies, defined as 7-nanometer and more advanced technologies, accounted for 50% of total wafer revenue, the company said.