2 Growth Stocks That Could Win Big From TSMC's $40 Billion Spending Plan
Taiwan Semiconductor Manufacturing (NYSE: TSM), popularly known as TSMC, released fourth-quarter results on Jan. 13 and shares of the chip giant surged following the report as it became evident that the demand for chips is going to stay strong in 2022 and beyond.
One of the highlights of TSMC's report was the big bump in the company's capital spending budget for 2022. The company has outlined a capital expenditure budget of $40 billion to $44 billion for this year, which points toward a roughly 40% increase over 2021 capex of $30 billion. This expected boost isn't surprising given the global semiconductor shortage that has hamstrung several industries.
TSMC expects annual revenue growth of 15% to 20% in the coming years, which is double what it estimated earlier. To achieve that, it needs to make more chips to satisfy booming demand, and it needs to invest in equipment so that it can ramp up production. The big jump in the company's planned spending to meet that need bodes well for Applied Materials (NASDAQ: AMAT) and ASML Holding (NASDAQ: ASML), which both supply semiconductor manufacturing equipment to TSMC.
Source Fool.com
