TSMC closed the fourth quarter of last year with sales of $ 15.74 billion, 5.7% higher than the third quarter of the same year and 21.2% higher than the same period last year. Total annual sales were $ 56.82 billion, while exactly half of those funds were brought in through technologies of 7 nm and thinner, while in 2020 they accounted for only 41% of sales. Direct 5nm products provided TSMC with around 19% of annual sales.
Measured against the dynamics of sales development in the lithography sector, the 7 nm process technology continues to give way to the more modern 5 nm process. In the third quarter of last year, 7nm products represented 34% of TSMC’s sales, and 5nm products took up 18%. In the fourth quarter, 7nm products accounted for only 27% of sales, and 5nm already accounted for 23% of the company’s total sales.
In 2020, sales of 7 nm products were achieved by a third, in 2021 its share fell to 31%, but the sales share of 5 nm products immediately rose from 8 to 19%. In its quarterly reports, TSMC states that the decline in the return for full year 2021 from 53.1% to 51.6% is mainly due to an increase in the proportion of 5nm products and unfavorable exchange rates, although this negative impact is partially offset through “ongoing attempts to improve the cost structure”. Apparently the price increase for TSMC services is implied in this context. In the fourth quarter, at least due to this factor, the profit margin increased sequentially by 1.4 percentage points to 52.7%.
Operating expenses for full year 2021 did not account for more than 10.7% of sales, up from 10.8% in 2020. Investments at the end of the fourth quarter did not exceed $ 8.46 billion, and in 2021 it became something Spent over $ 30 billion on new business building and advanced technology development. Recall that by the end of 2023 TSMC shipped 3.725 million 300mm silicon wafers in the fourth quarter, 2.2% more than the third quarter and 14.8% more than a year earlier. The conveyor belt load is close to the maximum, there are hardly any reserves for further growth without the commissioning of new systems and lines.
The structure of sales by industry has also changed in the past year. Smartphones made up only 44% of TSMC’s total revenue at the end of the fourth quarter, up from 51% a year earlier. At the same time, the share of sales attributable to the products for the HPC segment increased from 31% to 37%. This includes central and graphics processors. The Internet of Things increased its share of sales from 7% to 9%, Automotive – from 3% to 4%, while the Consumer Electronics segment reduced its share of sales from 4% to 3%. Overall, the automotive segment grew the most in monetary terms at the end of the year (+ 51%), followed by high performance computing (+ 34%), while the dominant smartphones only increased their core sales by 8%. The Internet of Things increased by 21%, and consumer electronics showed a modest increase in sales of 2%.
TSMC’s net income rose 16.4% for the fourth quarter to a record $ 6 billion year over year and 6.4% quarter over quarter. Revenue at the end of 2021 amounted to 56.82 billion US dollars, an increase of 24.1 percent over the previous year.
JP Morgan experts expectAccording to the 2022 results, TSMC’s revenue will increase by 25% as this will be facilitated by the price growth for the company’s services as well as the influx of large customers represented by Qualcomm and NVIDIA from Samsung. Other industry analysts also tend to believe that the cost of TSMC services will continue to rise this year. Morgan Stanley experts believe the acceleration in inflation this year will negatively impact demand and the company’s revenues.