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Why Taiwan Semiconductor Manufacturing Company Limited (TSM) stock is gaining in Pre-Market?

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Shares of the Taiwan Semiconductor Manufacturing Company Limited (TSM) stock were rising in the pre-market trading session today after the TSM stock announced its first-quarter financial results.TSM price saw a push of 0.87% to reach $121.71 a share at the time of this writing. It seems that TSM stock was gloomy in the last trading session and closed with a 0.35% drop. Let’s look at current events in depth.

First Quarter Financial Results:

TSM stock generated $12.92 billion in revenue in the first quarter of 2021 representing a record rise of 25.4%.The revenue was estimated at $12.7 billion to $13 billion earlier by the TSM. Net profit of T$139.7 billion has beaten the estimate of T$134.01 billion by the 22 analysts. Profit rose by 19% in the first quarter.

TSM stock projected the second-quarter revenue to be between  $12.9 billion to $13.2 billion as compared to $10.38 billion in the same quarter of the previous year. Revenue growth for the year 2021 is forecasted to be 20% by the Taiwan stock.

TSMC Development and Future Plans

TSM stock has increased the financing from the previously forecasted range of $25 billion to $28 billion to $30 billion for the production and development of advanced chips. Moreover, TSMC has acquired the land and initiated the construction work for new facilities and also hiring new staff for expansion in the future. Taiwan stock is planning the investment of $100 billion in the next three years in order to increase the capacity in its plants in response to the $20 billion plan announced by Intel Corp.

TSMC warns Chip Shortage Lasting in 2022:

TSMC warned the customers that chip shortage might last till 2022 despite all its effort for sufficient chip production. The world’s biggest chip maker is expanding its capacity in order to meet the need of the consumers. The high demand for semiconductor chips is due to the high demand for power devices such as smartphones and laptops as the working mode has been shifted from offline to online in many businesses due to COVID-19 escalations all around the globe.

Conclusion:

So far so good for TSM stock as far as market sentiment is concerned.TSM stock has beaten the analyst estimation in the first quarter results of 2021. The chip shortage has boosted the growth of TSMC as it is expanding its plant capacity and hiring new staff in order to meet the needs of its clients like Apple Inc and Qualcomm Inc. In a nutshell, TSM stock can be a good bet for investors having long-term prospects.

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