FILE PHOTO: Logo of Taiwan Semiconductor Manufacturing Co (TSMC), in Hsinchu

Shares of Taiwan Semiconductor Manufacturing (TSM) were up by 87% in 2020. This year, the market demand for various chips is higher than ever before and this situation may continue until 2023. This is a huge growth opportunity for TSMC. To know, TSMC controls more than half of the global market for made-to-order chips.

TSMC’s first quarter 2021 earnings report shows that smartphone and high performance computing represented 45% and 35% of net revenue respectively, both platforms have high market demand and continuing to rise. The demand for chips in internet of things and automotive industries are not far behind.

The company reported its first quarter revenue was $12.92 billion, which increased 25.4% year-over-year and increased 1.9% from the previous quarter. This means that from the beginning of this year, the market has a high demand for chips. At the same time, based on current business outlook, the company's management expects its revenue for second quarter 2021 that is expected to be between $12.9 billion and $13.2 billion.

According to reports, there are several production plants in China that were forced to stop production due to chip shortages currently. At the same time, the electric vehicle industry represented by Tesla and NIO is also booming and it has high demand for chips as well. TSMC took stock of a situation and said that it expects to invest $100 billion over the next three years to increase capacity to support the manufacturing and R&D of advanced semiconductor technologies.

Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.