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$TSM Q4 2020 Earnings Review
I forgot to post this last week when I sent out a newsletter article covering $TSM Q4 2020 earnings results. While I am not a buyer at these levels (17% above its 10 WMA), the roadmap for TSMs dominance into the future is quite clear.
You can read the full post on either:
- 2021 CapEx Guidance: $25-$28B vs. consensus of $21B (+26% beat); represents ~40% growth over the $19B in 2020.
- The aforementioned CapEx is revenue for WFE (water fabrication equipment) companies.
- While TSM was silent on the topic, separate reports confirmed Intel is outsourcing ~15-20% of its non-CPU chip production, in addition to its mid-range and high-end CPUs which are projected to enter mass production using TSMC’s 3nm node in 2H22.
- The last time TSM increased its capital intensity like this, they generated a 15% Sales CAGR over 5 years - before supply and demand imbalances tilted favorably towards the semi space.
- TSMC expects full volume production of 3nm chips in 2H 2022. The company expects its 3nm node will contain roughly 250 million transistors per square millimeter of silicon.
- TSMC continues to outpace its two main competitors - note that GlobalFoundaries gave up at 14nm (not for lack of capital - this is simply an engineering constraint)
To conclude - I am sure most of you have heard about the current chip shortage. Guess what this will do for industry pricing? Yes, it will go higher. TSMC's pricing power is remarkable and will only be augmented by the current shortage.
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