Taiwan Semiconductor Manufacturing (TSM), the dominant independent chip manufacturer in the world, reported earnings today, October 14, of $1.08 per share for the September quarter. Wall Street analysts hd expected earnings of $1.04 a share.
The stock closed up 2.35% today on the news.
Earnings were up 17% from the September quarter of 2020. Sales climbed 23% year over year to $14.88 billion. The company raised its sales forecast for 2021 to grow of 24%.
The company raised its forecast for fourth quarter revenue to $15.4 billion to $15.77 billion. Wall Street is projecting sales of $15.43 billion. In the September quarter of 2020, the company saw sales of $12.93 billion.
The global chip shortage has been good for Taiwan Semiconductor, which increased chip prices earlier this year. The company expects a gross profit margin of 51% to 53% in the fourth quarter. Its gross margin in the third quarter was 51.3%. That’s up from 50% in the second quarter. “We expect TSMC’s capacity to remain very tight in 2021 and throughout 2022,” CEO C.C. Wei said in the company’s conference call.
So far, the company said, the global chip shortage has resulted in only modest softening of demand for the company’s chips for smartphones and PCs in the fourth quarter. in a conference call.
Capital spending plans remain robust, to put it mildly, which is good news for chip equipment makers such as Applied Materials (AMAT) and ASML Holdings (ASML). The company plans to invest $100 billion over the next few years to increase production. Shares of Applied Materials closed up 3.01% today and shares of ASML gained 4.55%.
Shares of Taiwan Semiconductor Manufacturing are up 135% since I added them to my long-term 50 Stocks Portfolio on October 7, 2019. In that same portfolio shares of Apple Materials are up 158% since I initiated that position on Decembnert 31, 2017.