According to TSMC's financial report, revenue in the first quarter of 2021 increased by 16.7% year-on-year to USD 362.41 billion, a new record.
On April 15, TSMC announced its first quarter results at a performance conference. According to the financial report, the company's revenue increased by 16.7% year-on-year to USD 12.92 billion, setting a new record; its net profit increased by 19.4% to USD 4.9 billion, exceeding market expectations; its gross profit margin was 52.4%, up from 51.8% in the same period last year.
According to the financial report, TSMC's advanced technology (7Nm and more advanced technology) accounted for 49% of its total wafer revenue in the first quarter. Among the revenue sources, the 5 nm chip shipment accounted for 14% of the total revenue of the category, and the 7 nm chip shipment accounted for 35% of the total revenue of the wafer.
TSMC expects the second-quarter sales of 2021 to be USD 12.9 billion to USD 13.2 billion, the operating gross margin to be 38.5% to 40.5%, and the market expectations to be 41.2%. The second quarter is expected to significantly reduce the supply of automotive chips to customers.
Since 2020, the spread of COVID-19 has strengthened the demand for mobile phones and laptop computers, which explains the rapid growth of market demand for chips. Recently, chips are in short supply all over the world, which has caused many industries such as automobiles, mobile phones, game consoles and security equipment to stop work and reduce production.
In this context, TSMC announced a price increase in March 2021. According to the plan, the company will increase the OEM price of 12-inch wafers from April 2021, with a quarterly increase of about USD 400 per wafer, or about 25%.
In the face of the structural growth trend of global chip demand, TSMC is striving to improve production efficiency and thus increase output. Wei Zhejia, CEO of TSMC, said the shortage of chips could last until 2022. In order to cope with the shortage of chips, TSMC's capacity utilization rate has exceeded 100% in the past year.
Mr. Wei also said the company would invest USD100 billion in capacity expansion over the next three years, but research and development and most production would continue in Taiwan.