The chip market appears back in full swing after a long winter of reduced demand, but its momentum may be slowed by supply issues.
Taiwan Semiconductor (TSMC), the world's largest contract chipmaker and industry bellwether, revealed yesterday that it expected a record NT$100 billion ($3.2 billion) in revenue for the current quarter, Bloombergsaid.
Increased sales helped TMSC beat net profit expectations in Q1 with an NT$33.7 billion result. Revenue more than doubled to NT$92.2 billion.
HSBC Holdings told Bloomberg that end demand has been stronger than expected in just about every cycle.
But TMSC chairman Morris Chang warned heavy demand would likely cause supply issues.
Demand is currently 30% greater than supply, even though TMSC has been building capacity as fast as it can. The company doesn't expect utilization to drop below 100% for at least two years.
Chang says he expects the chip market to grow 22% this year. It will likely take several months for the supply-demand imbalance to impact on retail devices.
UK mobile chip designer ARM has also benefited from the surge in demand, nearly doubling its own first-quarter profits to £25.9 million ($39.3m).
The biggest driver of this profit was mobile devices. ARM’s chips are used in 95% of mobile devices in the world, including the iPhone and the iPad.