‘Over 100% Utilization’: TSMC Reports Double-Digit Monthly, Quarterly Revenue Gains

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Taiwan Semiconductor Manufacturing Company’s (TPE:2330) (TSMC) March revenue hit record highs, the company reported Friday, capping off a historic quarter for the world’s largest semiconductor foundry. 

TSMC said that March revenue hit $4.5 billion (NTD 129.13 billion), climbing 21.2% from February and up 13.7% from a year prior. Overall for its first quarter, the firm saw its revenue climb 17% to $12.7 billion (NTD 362.4 billion) narrowly beating analyst estimates of NTD 360.2 billion. 

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In a note to customers earlier this year, seen and verified by multiple other media outlets, TSMC CEO C.C Wei wrote that the company’s fabs have been “running at over 100% utilization over the past 12 months,” but demand is still outpacing supply. In order to match market demand, the company plans to spend $100 billion over the next three years. $28 billion of this will be spent in 2021. 

TSMC’s stock is set to close the trading day in Taipei down 1%, but up 2% on the week. In the last six months, the stock is up 32.61% and over 100% on-year.

Earlier this week, TSMC’s smaller rival, United Microelectronics (TPE:2303) reported that its March revenue hit a record high of $584.5 million (NTD 16.62 billion) with first-quarter revenue at $1.65 billion (NTD 47.1 billion). 

When Will Water Woes Hit TSMC’s Bottom Line?

But both companies are up against a historic drought that’s pushing water supplies in Taiwan to all-time lows. TSMC’s facilities in Hsinchu use 63,000 tons of water a day, which is proving to be a challenge as the city’s reservoirs are bone-dry. 

Source: http://water.taiwanstat.com/

To mitigate the impact of the drought on operations, the company has signed a deal for daily deliveries from more than 100 water tankers. While most of Taiwan’s center and south are suffering from a drought water supply in the north is still relatively plentiful. The government has been aggressively cloud seeing above reservoirs, but so many in the country are still under 10% capacity. With a mild typhoon season predicted for the summer of 2021 relief might not come for some time. 

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Given the severity of the drought and receding waters, netizens and researchers were able to find a traditional Thao canoe that had been sunk for 20 years.

 

The author has no position in any of the stocks mentioned. NewAgeAds LLC has a disclosure and ethics policy.
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