TSMC expects to post revenues of between US$12.7 billion and US$13 billion in the first quarter of 2021, which is a 1.3% sequential increase at the midpoint. Gross margin and operating margin for the quarter are estimated at 50.5-52.5% and 39.5-41.5%, respectively.

TSMC also disclosed its capex target this year will be US$25-28 billion, with 80% of the sum to be allocated for advanced technologies including 3nm.

TSMC reported net profits grew 23% on year and 4% sequentially to NT$142.77 billion (US$5.1 billion) in the fourth quarter of 2020. EPS for the quarter came to NT$5.51, or US$0.97 per ADR unit.

TSMC posted net sales of NT$361.53 billion for the fourth quarter, up 1.4% sequentially and 14% from the same period in 2019. Gross margin arrived at 54% compared with 53.4% in the prior quarter and 50.2% a year earlier, while operating margin climbed 1.4pp on quarter and 4.3pp on year to 43.5%.

In US dollars, TSMC's fourth-quarter revenue came to US$12.68 billion representing increases of 22% on year and 4.4% sequentially.

TSMC disclosed 5nm chip shipments accounted for 20% of its total wafer revenue in the fourth quarter of 2020, while shipments of 7nm and 16nm chips accounted for 29% and 13%, respectively, of the revenue. Advanced technologies, defined as 16nm and more advanced technologies, accounted for 62% of TSMC total wafer revenue in the fourth quarter.

TSMC credited its robust 5nm chip shipments during the fourth quarter to demand for 5G smartphones and HPC-related applications. TSMC saw its shipments for smartphones represent 51% of the foundry's total wafer revenue in the fourth quarter, followed by those for HPC-related applications with 31%.

North America remained the largest market of TSMC in the fourth quarter of 2020. Sales generated from its clients based in North America also grew as a proportion of company revenue to 73% in the fourth quarter.

In all of 2020, TSMC saw sales generated from 5nm process technology account for 8% of its total wafer revenue. Sales generated from orders for smartphones accounted for 48% of the foundry's total revenue last year, while the North America market generated 62% of the revenue.

TSMC expects to continue outperforming the industry average this year, with sales growth in the mid-teens range.