Supply and demand means TSMC set to beat revenue expectations for Q4 2021

TSMC looks set to beat its own revenue guidance for calendar Q4 of 2021 if the latest monthly figures are anything to go by, rounding off a year of strong growth for the semiconductor industry as a whole. The Taiwanese chipmaker is currently in a quiet period, during which it refrains from making contact with the investment …

[Anonymous Coward]

"We're pleased as punch! We're getting all the benefits of market manipulation and price gouging without having to do anything to cause it that would put us at legal risk! Here's to competitor's accidents and plant shutdowns!"

[Anonymous Coward]

"...all the benefits of market manipulation and price gouging without having to do anything to cause it..."

I would phrase this as "...all the benefits of strong demand, such that we're able to take market share from poorly-managed competitors and expand our operations to better supply our customers while continuing to make a strong profit..." In other words, I would accept and acknowledge that a majority of the time successful business outcomes are actually the product of effective management (skill) plus favourable market conditions (luck); collusion and other kinds of market manipulation absolutely happen but are the exception rather than the rule. The main evidence of this is that they're increasing capacity, not just sitting there raising prices; this is traditional business cycle behaviour. A ruthless gouger would jack prices to the moon, wait for their competitors to make huge capital investments from weak financial positions, then use some of their stockpiled profits to buy up their factories cheaply during the inevitable bust, increasing their power at the expense of all other market participants. That approach would be especially effective for TSMC because they are also the runaway technology leader and can rely on that leadership to cushion the effects of a supply glut at lower-tech nodes.

The semiconductor business has always been viciously competitive and subject to soaring booms and deep busts on account of huge capital costs, rapid obsolescence, and wild swings in demand. TSMC's behaviour is entirely consistent with that history and pretty well guarantees it will continue repeating. If you want an example of supply being artificially constrained by cartels in a capital-intensive business during a period of strong demand, look instead at the behaviour of passenger airlines from roughly 2009-2019. That will supply the necessary contrast with semis and hopefully dial down the cynicism just a notch or two. You don't have to like business but it's important for the well-being of our advanced technical society that you accept the possibility of making an honest profit.

[Snowy]

Taiwanese or Chinese chipmaker that disagreement for a business that is important for the well-being of our advanced technical society is scary.