Predicting Mid/high-20% Sales Growth This Year
The author is an analyst of NH Investment & Securities. He can be reached at hwdoh@nhqv.com. -- Ed.
TSMC is aiming at 2022 sales growth in the mid/high-20% range and capex increase of 40% y-y to US$42bn. We expect the global semiconductor equipment sector to benefit.
TSMC predicting mid/high-20% sales growth this year
On Jan 13, TSMC announced its 4Q21 earnings, reporting sales of NT$438.2bn (+6% q-q), OP of NT$182.8bn (+7% q-q), and NP of NT$166.4bn (+6% q-q), with OP beating consensus by 3%. Smartphone-oriented semiconductor process business led earnings improvement. Shipments of 5nm A15 processors used in customer Apple’s iPhone 13 remain brisk.
TSMC has presented 2022 sales growth guidance in the mid/high-20% range, a strong figure considering the foundry industry’s average annual growth rate of 10%. Such expansion also outpaces the +19% y-y recorded for 2021, when growth was high due to non-face-to-face demand. In 2022, the HPC and automotive semiconductor segments are to lead sales growth for the firm. TSMC’s 1Q22 sales guidance stands at between NT$458.1bn and NT$474.7bn, exceeding the consensus by 10%.
TSMC sets 2022 capex at US$42bn (+40% y-y)
TSMC has forecasted its 2022 capex at US$40~44bn (+40% y-y). Such aggressive estimated capex execution is attributable to long-standing semiconductor supply shortages stemming from robust structural non-face-to-face demand, the rising need for expensive equipment such as EUV (in excess of W200bn per unit) due to the increasing number of layers being applied in next-gen 3nm processes, and a desire to widen its market share gap with large rivals such as Samsung Electronics (SEC), etc.
TSMC’s capex increase should benefit global semiconductor equipment players such as ASML, Lam Research, and AMAT. Among domestic companies, Hanmi Semiconductor accounts for the largest portion of sales to Taiwan, including TSMC. In the current market environment, many have predicted that 2022 industry growth will slow due to seemingly excessive equipment investment last year by semiconductor firms. TSMC’s recent conference call should help to dispel such concerns.