TSMC reports Q4 revenue rose 24.1% YoY to $15.74B as net profit reached $6.01B; capital spending will reach between $40B and $44B in 2022, up from $30B in 2021
Reuters
Context & Ripple Effects
TSMC had already lifted its 2021 investment plan to $25B–$28B; the new $40B–$44B range marks a further step-up in its manufacturing buildout. The company’s subsequent stronger Q2 earnings show that the revenue and profit momentum continued beyond the quarter reported here.
The longer record makes the announcement a useful baseline: TSMC later set a lower $28B–$32B 2024 capex range alongside renewed growth expectations, before projecting $52B–$56B of 2026 capital spending.
First-order effects
TSMC raises its 2022 capital-spending commitment from $30B in 2021 to $40B–$44B, directing substantially more cash toward manufacturing capacity and equipment.
The reported revenue and profit growth give TSMC more internally generated resources to support that investment program.
Second-order effects
TSMC’s much larger 2022 budget sets a higher demand signal for the equipment and construction inputs required for its manufacturing expansion, although the coverage does not identify suppliers.
The later reduction in TSMC’s 2024 capex range shows that investment plans can adjust with the semiconductor cycle even as revenue growth resumes.
Third-order effects
Across the coverage, TSMC’s spending moves in large increments—from the 2021 increase to the 2022 step-up, a lower 2024 plan, and a higher 2026 projection—making capital allocation a central mechanism for managing capacity through demand cycles.
If that pattern persists, semiconductor manufacturing capacity will remain shaped by long-lead investment decisions rather than quarter-to-quarter revenue alone.
The trend: TSMC’s results illustrate a contracted semiconductor cycle in which revenue upswings finance capacity commitments that are revised as demand conditions change.
Foundry capacity will be precious for the foreseeable future as demand for semiconductors only grows. I updated this Capex chart in light of TSMCs increased commitment. I remember when Intel was the foundry leader and we marveled at $10b capex plans. https://twitter.com/...
DigiTimes (2022.01.13): “TSMC's Baoshan R&D Center takes a sharp turn. Intel, Apple's orders - king does not face king”. [ my interpretation: totally separated. In Chinese chess, the king cannot face the opponent's king on same column ] https://twitter.com/...
TSMC raised its revenue growth projections and unveiled plans to spend as much as $44 billion expanding in 2022, signaling confidence that voracious demand for iPhones and chips will persist for years.
TSMC, Apple's most important chipmaker, is now projecting average sales growth of 15% to 20% annually — as much as double its previous expectation. It foresees sales of $16.6 billion to $17.2 billion in the first quarter alone, at least 5% ahead of projections.
$40-40b Capex spend shows the commitment to leadership TSMC has as a foundry. Another fun data point is for the next two years their orders of ASML machines are 2x any other foundry. https://twitter.com/...
My key points from TSMC today: Massive capex for 2022, up to $44b v $30b in 2021 Revenue growth to continue: 25-30% in 2022 More chips per device continues to be the trend Europe plans still unclear No new clarity on longer-term capex (recall their three-year $100b forecast)