TSMC warns global chip shortage could extend to 2022

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TSMC, the market leader in the semiconductor chip manufacturing industry, has expressed its concerns regarding the global semiconductor chip shortage and warned that it could be till 2022.

TSMC, or Taiwan Semiconductor Manufacturing Company, is one of the tech leaders on the planet. It is the first dedicated semiconductor foundry in the world and the largest independent semiconductor foundry. It has been the manufacturer of semiconductor chips for tech giants such as Apple, AMD, Qualcomm, Nvidia, MediaTek, and Marvell.

TSMC Vs. Chip Shortage

Recently, the tech industry has been facing an unprecedented semiconductor chip shortage. This has resulted in tech products’ unavailability, such as graphics cards, PS5, Xbox, and CPUs. It has affected the automobile industry too.

Manufacturers such as Ford and General Motors have stopped or reduced several cars’ production to mitigate the shortage. This reduction in car production due to a need for chips has caused other companies such as Intel to consider catering to that market.

TSMC has been affected severely by the rapid demand for semiconductor chips in recent times. Now, the CEO of TSMC, C.C. Wei, has stated that “In 2023, I hope we can offer more capacity to support our customers. At that time, we’ll start to see the supply chain tightness release a little bit.”

The CEO stated this when the company released its reports for the previous quarter-year. This quarter, due to huge demand, TSMC recorded a net profit of $4.91 Billion for January-March 2021 and $12.7 Billion in revenue.

These comments by the CEO reflect the take on the shortage by various tech companies. Intel CEO Gelsinger stated that it would take a few years to address the chip shortage issue. Nvidia, too is expecting the demand to be much higher than the production.

Plans for the future

TSMC is hopeful about the supply of chips to automakers. It stated that the chip supply to the automobile manufacturers could improve by next quarter year. TSMC is now planning to construct new factories to counter the demand, but it could take years to operation. The CEO stated that the fabs of the company are already running their fabs at 100%.

For the future, TSMC now increased its investment for expanding its existing capacities from $25-28 Billion USD to $30 Billion. It is also planning to start construction on a $12 Billion facility in Phoenix, Arizona. The company is looking forward to investing $100 Billion to ramp up its production in the next three years.

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Image courtesy of The Verge/YouTube Screenshot

Aravind A S

I am a law student currently working as an intern at Micky News India. I am interested in content writing and research.

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Aravind A S

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