Top 10 semiconductor factories record high profits, but face 3 hidden worries including “Ukraine”

The demand for chips continues to be strong, and the world’s top 10 semiconductor factories, including TSMC, recorded a new high in net profit last quarter, but the operating environment faces three hidden concerns, including the “Ukrainian situation”.

Nikkei reported on the 5th that due to the strong demand for chips, the world’s top 10 semiconductor manufacturers such as TSMC, Samsung Electronics, and Nvidia boosted the total net profit last quarter (October-December 2021, and some are November 2021-January 2022). The value reached 36.6 billion US dollars, a sharp increase of 30% over the same period last year, setting a record high for the same period since 2011 for which data can be continuously compared.

The report pointed out that due to the Metaverse and carbon reduction business opportunities, the demand for chips is expected to continue to be strong in the future, but the operating environment of semiconductor manufacturers has begun to change, and they are facing three hidden worries, namely increased investment, talent shortage and the situation in Ukraine. Intel CEO Pat Gelsinger (Pat Gelsinger) said, “In the semiconductor industry, no matter who you are, you are facing problems such as rapid inflation and rising manufacturing costs.” Although Intel and TSMC’s revenue increased in the last quarter, their net profit rate shrank. Among them, TSMC’s net profit rate was about 38%, down more than 1 percentage point from the same period last year.

According to reports, the cost of building new factories and developing next-generation chips has increased, and excellent engineers are indispensable for increasing production or developing next-generation technologies. In order to compete for talents, personnel costs have also increased significantly. This is also seen as This is one of the reasons why TSMC’s net profit rate fell last quarter.

The report pointed out that the deteriorating situation in Ukraine and the procurement of rare resources for semiconductors are also a concern. Neon gas, which is indispensable for semiconductor manufacturing, depends on Ukraine for 70% of the supply. Although the Semiconductor Industry Association (SIA) stated that “there is no immediate risk of supply chain interruption”, countermeasures such as alternative procurement will become the focus in the future. According to the calculation of Morgan Stanley in the United States, the neon gas inventory of Taiwan’s semiconductor companies is 6 months’ consumption. If the war is prolonged, the inventory alone will not be able to guarantee the supply, and the procurement crisis will intensify.

The subjects included in the Nikkei statistics include TSMC, Nvidia, Samsung Electronics, Broadcom, Qualcomm, Intel, AMD, Texas Instruments, Micron and SK Hynix.

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