Taipei — Shares in Taiwan's microchip giant TSMC soared on Friday, forecasting better-than-expected profits for the rest of the year and following the announcement of plans to build its first factory in Japan.
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The world is amid a severe
shortage of silicon microchips used in everything from cars and missiles to phones and games consoles.
Taiwan Semiconductor Manufacturing Company (
TSMC) operates the world's largest silicon wafer factories. It produces some of the smallest -- and most advanced —microchips.
On Thursday, the tech giant said it expected as much as $15.7 billion in revenue for the fourth quarter, higher than analyst estimates, as demand for
chips remained strong.
Net income in the third quarter rose a forecast-topping 14 percent to $5.6 billion.
The news was music to investors' ears, with TSMC's share price rising more than 4.5 percent in morning trade in Taipei.
TSMC's factories are already operating at full capacity, and the company warned production will likely remain stretched next year.
"We expect TSMC's capacity to remain very tight in 2021 and throughout 2022," Chief Executive Officer C.C. Wei said on a conference call.
"While the short-term imbalances may or may not persist, we believe our technology leadership will enable TSMC to capture the strong demand for our advanced and specialty technologies," he added.
With so much of TSMC's production concentrated in Taiwan, many countries have been wooing the company to build foundries in their territories.
The company has already pumped billions into building a state-of-the-art foundry in Arizona. On Thursday, it said it would construct its first factory in Japan.
Work will begin next year and is being partly financed by the Japanese government, hoping the plant will start producing chips by late 2024.
Japan's Prime Minister Fumio Kishida told a news conference Thursday evening that the deal would "improve the independence of our country's semiconductor industry and contribute considerably to our economic security."
"We will add support for TSMC's large-scale private investment to our economic plans," Kishida added.
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