Global chip sales will grow 13%: TSMC

Demand for 5G services and high-performance computing devices would drive the company’s growth in the near term, two executives said.

Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) expects global semiconductor industry sales to grow by up to 13% this year, excluding memory chip operations.

The world’s largest contract chipmaker made the prediction in its annual report released last week.

Amid expanding 5G services, faster development of artificial intelligence and digital transformation, demand for electronic gadgets is expected to grow at a steady pace and drive semiconductor sales, excluding memory chip revenue, 11 to 13 percent, he said.

Photo: I-Hwa Cheng, Bloomberg

The prediction puts global sales growth behind TSMC’s expected sales figures: the chipmaker told an investor conference on Thursday that its sales this year could increase by more than 29% in US dollars.

Due to the rapid development of commercial 5G services, 5G smartphones have a shorter life cycle, the company said, adding that global smartphone shipments increased by around 6% last year and are expected to increase by 1 to 3% this year.

Global sales of high-performance computing devices rose 10% last year and are expected to rise 1-3% this year, TSMC said. He attributed last year’s growth to a booming home economy caused by the COVID-19 pandemic that necessitated server and data center upgrades.

Digital transformation has boosted global shipments of Internet of Things devices by 30% amid strong demand for home automation equipment, smart watches and smart health devices, TSMC said, adding that the Revenue growth in the segment is expected to exceed 20% this year.

Global vehicle sales last year rose just 3% due to a shortage of chips and the effects of the pandemic, but the auto market is expected to grow 7-13% this year amid improved chip supply, he said.

Consumer electronics sales could fall 1-3% this year, but sales of high-end mini-LEDs, organic LEDs and smart TVs are expected to thwart the recession by maintaining momentum from a year earlier, he added.

The semiconductor industry is expected to post a compound annual growth rate (CAGR) of 7-9% from last year to 2026, excluding memory chip vendors, the company said.

He added that the CAGR in the pure-play wafer foundry segment, which is dominated by TSMC, would exceed this forecast.

Last year, the company posted sales of $56.82 billion, up 24.9% year-on-year and its 12th consecutive annual revenue record. Last year, it accounted for 26% of global semiconductor sales, excluding memory chips.

TSMC President Mark Liu (劉德音) and CEO CC Wei (魏哲家) said in the report that the company has entered a higher growth cycle and they expect demand for services to 5G and high-performance computing devices are driving the chipmaker’s sales growth over the next few years.

To meet this demand and improve its competitive edge, TSMC said it will expand globally and expand its talent pool.

In Taiwan, TSMC’s advanced 3-nanometer process is expected to come online in the second half of this year and mass production is expected to begin next year, while the more sophisticated 2-nanometer process is expected to begin commercial production in 2025. .

The company also plans to expand its plant in Nanjing, China, using the mature 28-nanometer process, with production capacity starting to ramp up in the second half of this year.

Its factory in Arizona is expected to begin commercial production in 2024 using the 5-nanometer process, and another factory in Japan’s Kumamoto prefecture is expected to produce chips using the 22-nanometer and 28-nanometer processes, also in 2024.

TSMC is due to hold its annual general meeting on June 8.

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