Apple Supplier TSMC Sees Q2 Profit Jump 11% On Higher Chip Demand

Taiwan Semiconductor Manufacturing Co TSM, the world's biggest contract chipmaker, reported an 11.2% jump in second-quarter profit powered by strong demand for semiconductors from personal-computer, smartphone and automobile sectors.

What Happened: The Taiwan-based company, which also counts chipmaker Nvidia Corp NVDA and Qualcomm Inc QCOM as customers, said net sales soared 19.8% to a record $13.34 billion.

The Apple Inc AAPL supplier, reported a profit of T$134.4 billion ($4.81 billion) for the three months ended June.

TSMC guided the current quarter revenue to be in the range of $14.6 billion to $14.9 billion, compared with $12.1 billion in the same period a year ago.

See Also: Apple Supplier TSMC's Q1 Profit Jumps 19% Amid Chip Shortage 

“Our second quarter business was mainly driven by continued strength in HPC and Automotive-related demand,” said Wendell Huang, chief financial officer at TSMC.

“Moving into third quarter 2021, we expect our business to be supported by strong demand for our industry-leading 5nm and 7nm technologies, driven by all four growth platforms, which are smartphone, HPC, IoT and Automotive-related applications.”

In the second quarter, shipments of 5-nanometer chips accounted for 18% of total wafer revenue; 7-nanometer accounted for 31%. Advanced technologies, defined as 7-nanometer and more advanced technologies, accounted for 49% of total wafer revenue.

Why It Matters: A global semiconductor chip shortage has boosted demand as automakers, smartphone and appliance makers scramble to secure supplies. Further, the pandemic has lifted the demand for work and learn-from-home devices.

TSMC had in April said it plans to spend $100 billion over the next three years to expand its chip fabrication capacity to cater to the anticipated growth in demand for fifth-generation telecommunications (5G) technology.

Price Action: TSMC shares closed 0.4% higher to $124.39 on Wednesday.

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Photo: Courtesy of Michael Wu via Flickr