What you need to know
- TSMC produces the A-series and M-series chips that power iPhones, iPads, and Macs.
- The Taiwanese chip company has posted record quarterly profits.
- Expectations are high that TSMC will benefit from huge chip demand in the next few years.
TSMC, the company that produces Apple's A-series and M-series chips for iPhones, iPads, and Macs, has posted record profits for the most recent quarter as well as impressive growth. The company also touted plans to pump huge sums of money back into its business.
Following the news that TSMC posted record quarterly profits the company said that it intends to spend at least a third more this year than it did last — last year saw the company spend $30 billion according to a Reuters report.
Taiwan Semiconductor Manufacturing Co Ltd (TSMC) , a major Apple Inc (AAPL.O) supplier that also has customers such as Qualcomm Inc (QCOM.O), posted a 16.4% rise in fourth-quarter profit.
The company said it expects to lift capital spending to between $40 billion and $44 billion this year. Last year it spent $30 billion.
The company also raised its targets for the coming years, citing a "multi-year megatrend."
With what it calls a "multi-year industry megatrend" of strong chip demand boosted by new technologies, TSMC raised its compound annual growth rate targets for revenue over the next several years to 15%-20% from 10%-15%.
TSMC, like Foxconn, sees its fortunes very much linked to Apple's. Apple has some big releases in the works including the rumored Apple Glass mixed reality headset and infamous Apple Car project. It seems very likely that both projects will involve TSMC, while the iPhone, iPad, and Mac chip production will no doubt prove lucrative for the chipmaker as well.