TSMC’s market value exceeds that of Buffett’s company, and its net profit will increase by 50% in 2020


Reporter Peng Xin
The strong demand for iPhone and the competition for production capacity of customers in various fields have promoted the rapid growth of chip foundry giant TSMC.
On the afternoon of January 14, TSMC released its financial report for the fourth quarter of 2020, with revenue of 361.532 billion NT dollars (about 83.622 billion yuan), a month on month growth of 1.43% and a year-on-year growth of 13.97%; its parent profit was 142.77 billion NT dollars (about 33.022 billion yuan), a month on month growth of 4% and a year-on-year growth of 23%, both of which set historical records.
In 2020, TSMC’s annual revenue reached NT $1339.255 billion (about RMB 309.77 billion), a year-on-year increase of 25.2%, and its net profit was NT $517.885 billion (about RMB 119.787 billion), a year-on-year increase of 50%.
Most of TSMC chips are used in mobile phones and high-performance computing products. From the perspective of major platform applications, the growth of TSMC in the fourth quarter mainly came from automotive electronics, consumer electronics and smart phones, with revenue growth of 27%, 29% and 13% respectively, while the revenue of high-performance computing and Internet of things dropped by more than 10%.
In this quarter, TSMC’s 5nm shipment accounted for 20% of the total wafer revenue, while 7Nm and 16nm shipment accounted for 29% and 13% of the total wafer revenue, respectively. Overall, advanced processes with 16 nm and higher technology account for 62% of the total revenue.
Wei Zhejia, President of TSMC, said that last year 5g and high-performance computing led to the high growth of TSMC. It is predicted that the company’s operation will continue to be strong in 2021. In addition to the demand for smart phones, 5g and high-performance computing, the demand for automotive semiconductors will recover.
TSMC said that at present, the demand of all semiconductor businesses has a strong growth. It is predicted that in 2021, excluding memory semiconductors, the growth will be 8%, and the wafer foundry industry will grow by 10%. TSMC will grow by more than 15% more than the industry average.
Huang Renzhao, chief financial officer of TSMC, said that the development of advanced process and special process technology is growing due to the increasing demand of customers. Therefore, the capital expenditure of this year will be greatly increased to about 25-28 billion US dollars, of which 80% will be used for advanced processes such as 3nm, 5nm and 7Nm, 10% for mass production demand of advanced packaging technology, and 10% for special processes.
The market pays close attention to the outsourcing of Intel chip orders. Previously, Intel announced that it planned to explain the chip manufacturing situation on January 21, and did not rule out entrusting TSMC to OEM production. Wei Zhe Jia said that TSMC would not comment on a single customer because the demand for 5g and high-performance computing has been strong for a long time. In addition, TSMC Chairman Liu Deyin mentioned that TSMC plans to expand production capacity in mainland China.
On the same day, the company also released the performance outlook for the first quarter of 2021. It is estimated that the revenue in the first quarter will be US $12.7 billion to US $13 billion, the gross profit margin will be about 50.5% – 52.5%, and the net profit margin will be 39.5% – 41.5%.
In 2021, the market value of TSMC has surpassed Berkshire Hathaway, the “stock god” of Warren Buffett, and become the 10th largest enterprise in the world. As of the close of January 13, the total market value of TSMC radio shares and US ADRs was $552.16 billion, while Berkshire Hathaway’s market value was $546.99 billion.
At the close of the New York Stock Exchange on January 13, us time, TSMC telex was 119.23 US dollars per share, down 5.52%; at the close of the Taiwan Stock Exchange on January 14, TSMC telex was 592 New Taiwan dollars per share, down 2.15%.