TSMC Earns Record Revenue In June To Post Strong Second Quarter 2021 Sales

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The Taiwan Semiconductor Manufacturing Company's (TSMC) revenue for the second quarter of 2021 has grown significantly year-over-year, reveals data shared by the company today.  TSMC earned NT$148 million in revenue in June, it outlined earlier today, with the revenue demonstrating a 28% year-over-year growth over June 2020. The growth comes as demand for semiconductors remains high, and analysts question whether current supply levels will outstrip demand next year or as 2021 comes to a close.

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In addition to sharing its financial data during regular reports, TSMC also lists down the revenue that it earned each month on its investor relations website. The company's revenue for the previous month shows that sales were strongest in June, pushing revenues higher than what it had earned in the preceding months.

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Additionally, it marks a significant growth over the previous year's performance, as the demand for technology products booms in the consumer electronics and other sectors. This demand has been helped by new products launched by several semiconductor companies and the booming orders from automotive manufacturers who have dealt with a pandemic-induced component shortage nearly throughout this year after cutting down their product demand forecasts last year.

When added to TSMC's revenues in April and May, the June revenue pushes the contract chip manufacturer towards 20% year-over-year and 3% sequential growth. Both of the growth metrics are higher than what TSMC achieved last year. At the end of its second quarter of 2020, it posted NT$311 million revenue, which was flat sequentially and 30% higher annually.

During the full second quarter, the Taiwanese fab brought in NT$372 million, making it one of its strongest quarters. In comparison, the first quarter allowed TSMC to rake in NT$362 million, and 2020's March quarter brought it NT$310 million through sales. The first half of the year is generally a slow one for TSMC, whose major customers often procure their orders as the year matures.

A snippet from TSMC's investor relations website showing its monthly revenues for 2021.

At its upcoming earnings release for the previous quarter, TSMC's management might provide details bout what it expects the future to hold. Some quarters believe that the current demand for semiconductors only reflects a 'demand-boom' ushered in by the ongoing pandemic and worry whether a buildup of inventory with the company's customers will reduce this demand moving forward.

Some TSMC's customers,  such as Santa Clara, California-based chip designer Advanced Micro Devices, Inc (AMD) and Cupertino tech giant Apple Inc, have either launched new products or plan to do so in the near future. Apple's plans for the iPhone and a new notebook computer and the demand for AMD's products such as graphics processing units (GPUs) will influence the creation of this hypothetical supply glut.

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More importantly, the world's largest personal computing chipmaker Intel Corporation has also reportedly sought access to TSMC's advanced chipmaking process technologies. Intel is the only company in the world that manufacturers its own processors for the x86 computing microarchitecture, and the company's chip processes have traditionally enjoyed a strong advantage over rivals such as TSMC or South Korean chaebol Samsung Electronics' chip foundry arm Samsung Foundry.

However, this lead, which now requires the latest chip manufacturing machines from a Dutch firm, is believed by many to have been reduced. Conventional monikers for chip processes often describe them through one of the dimensions of a transistor - billions of which are present on modern-day processors, graphics processing units and other silicon products built with newer technologies.

TSMC's '5nm' process node is theoretically equivalent to Intel's 7nm node, and some industry watchers speculate that it is equivalent to the latter's older 10nm node. Intel expects to manufacture and ship its 7nm products next year, which is when TSMC will churn out chips manufactured on its 3nm node.

The Taiwanese company is also building a chip plant in the American state of Arizona, which it expects to be operational from 2024. This facility intends to produce 5nm chips, but TSMC should expand it to include newer processes should its customers express the need, suggest previous management practices.

The author has no position in any of the stocks mentioned. WCCF TECH INC has a disclosure and ethics policy.
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