Chip Shortage to ContinueIn the earnings report, Taiwan Semi reported strong demand across its four growth platforms, which includes smartphone, HPC, IoT, and Automotive-relative applications. While demand remains strong for the company, the industry continues to operate in a persistent shortage that is sending prices higher.
Reuters reported that Taiwan Semi CEO C.C. Wei warned during the conference call that it will continue to operate with tight capacity through 2022. This is bad news for downstream electronics industries as chip supply has slowed production in all sorts of industries. Apple (AAPL), which accounts for one-fourth of TSM’s revenue, announced a cut in iPhone production goals due to the ongoing chip crunch.
GuidanceWhile TSM’s report isn’t great for electronics companies, the company expects revenues to exceed consensus in the fourth quarter at a range from $15.4 billion to $15.7 billion.
Gross profit margins are expected to fbe between 51% and 53% while operating margins are expected to edge lower from the previous quarter to a range of 39% to 41%.