TSMC intends to boost production by 47% in 2022

• TSMC has kept aside $40-$44 billion in 2022 order to increase its manufacturing capabilities

• The company set a long-term target of “53% and higher” for its gross margins

Taiwan Semiconductor Manufacturing Co. (NYSE: TSM), said it would increase its investment to boost production capacity by 47%in 2022 from a year earlier as demand the demand for semiconductor chips continues to rise amid the continued chip shortage.

The chip manufacturer has earmarked $40-$44 billion in 2022 order for increasing its manufacturing capabilities - that's up from $30 billion in 2021. TSMC is the largest chip manufacturer in the world and is the main manufacturer for Apple and Qualcomm, among others.

READ MORE: TSMC planning to build new factories in US, Japan

The company set a long-term target of "53% and higher" for its gross margins, up from a previous target of "50% and higher".

Wall Street Journal reported that TSMC increased its auto chip production by about 60% in 2021, but it still only accounts for 4% of its annual revenue. Around 44% of its revenue comes from the smartphone business.

Ambitious targets

TSMC forecast first-quarter revenue to be in the range of $16.6 billion to $17.2 billion, compared with $12.92 billion in the same period a year earlier. For the year, it expects to grow in the mid -to-high 20% range in U.S. dollar terms.

Last November, TSMC and Sony Group Corp. announced their plans to build a $7 billion chip plant in Japan and expected strong support from the Japanese government.

Also Read: TSMC and Sony to build a $7 billion fab lab in Japan

The company is entering "a period of higher structural growth", Chief Executive C. C. Wei told an online earnings briefing.

The company expects record chip demand in the coming years and is going ahead with its 2021 plan for a $100 billion expansion of its facilities.

Picture Credits - TSMC