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Intel, Nvidia, AMD Get Boost From Record TSMC Profits, Bullish Chip Demand Forecast

TSMC, the world's biggest contract chipmaker, is doubling its forecast for revenue growth amid what it calls a "multi-year industry megatrend" for global semiconductor demand.

Updated at 9:45 am EST

Taiwan Semiconductor Mfg. Co. Ltd.,  (TSM) - Get Taiwan Semiconductor Manufacturing Co. Ltd. Report the world's biggest contract chipmaker and a lead supplier for Apple  (AAPL) - Get Apple Inc. Report iPhones, posted record quarterly profits and forecast a record boost in capital spending to meet the surge in global semiconductor demand.

TSMC said earnings for the three months ending in December rose 16.4% from last year to just of $6 billion, with revenues surging 24.1% to $15.75 billion as the group ran its global chipmaking fabs at full capacity in order to meet unprecedented demand.

The industry bellwether said it would boost capital spending to between $40 billion and $44 billion this year, a 33% increase from 2021 levels, and doubled its compound annual growth rate targets for revenue to between 15% and 20% amid what it called a "multi-year industry megatrend" for global semiconductor demand.

“Our fourth quarter business was supported by strong demand for our industry-leading 5-nanometer technology,” said CFO Wendell Huang. “Moving into first quarter 2022, we expect our business to be supported by HPC-related demand, continued recovery in the automotive segment, and a milder smartphone seasonality than in recent years.”

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TSMC's U.S.-listed shares were marked 9% higher in early trading Thursday to change hands at $144.00 each. 

The bullish outlook provided a solid boost for other companies in the sector, as well, with semiconductor equipment maker ASML NV  (ASML) - Get ASML Holding NV Report rising 4.75% in early trading in the U.S. and 4.1% higher in Amsterdam.

Intel  (INTC) - Get Intel Corporation Report, (+0.4%) Nvidia  (NVDA) - Get NVIDIA Corporation Report, (+1%) Advanced Micro Devices  (AMD) - Get Advanced Micro Devices, Inc. Report (+1.2%) and Micron Technology  (MU ) - Get Micron Technology, Inc. Report(+1.8%) were all trading higher in pre-market, as well, with investors buoyed by TSMC chairman Mark Liu's assessment that semiconductor industry growth "will continue to be fueled by the structural mega trends of 5G and high-performance computing.”

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