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TSMC announced that it plans to build a new factory in Japan to meet the long-term chIps demand. The company also said that 2022 will see tightened supply, as the COVID-19 boom saw electronics fly off the shelf, as global supply chains suffered.

TSMC is the world’s largest contract chipmaker, which gives it a lot of leverage and responsibility. The advanced chips it makes are used in high-end smartphones, datacenters, low-end consumer goods, cars, for artificial intelligence and a wide variety of items.

2021’s tight supply will carry on into 2022

According to TSMC Chief Executive officer Wei, the company’s capacity will remain tight this year and into 2022. He added that chip pricing will be strategic and not opportunistic to continue creating value. Wendell Huang, the Chief Financial Officer, said that Q3 was mainly boosted by strong demand in all four growth platforms (smartphones, cars, IoT (Internet of Things)).

Into the fourth quarter, the company expects the business to be supported by strong demand for its 5-nanometer technology. Citing an industry trend of strong chip demand, the company raised its revenue growth forecast for 2021 to 24% v. an earlier estimate of above 20%.

A period of high growth

Wei reported that the company has entered a period of higher structural growth and set a long-term target of 50% and higher for its gross margins. TSMC’s revenue for the quarter went up 22.6% to $14.88 billion, to align with the company’s prior estimated range of $14.6 billion to $14.9 billion. For the quarter ending December, TSMS expects revenue of $15.4 billion to $15.7 billion.

TSMC shares have gone up about $8.5% so far in 2021, giving the company a market value of $526.3 billion, doubling that of its competitor and client, Intel.