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Monday, October 18, 2021

TSMC is building a new chip factory in Japan, but warns of ‘tight’ supply until 2022

TSMC has announced plans to expand its chip-making efforts with a new factory in Japan during its third-quarter 2021 earnings call, marking the latest expansion of what is already the world’s largest chipmaker. via Reuters. But the news comes as the company also warns that chip supply will be “tight” through 2022 as a result of ongoing shortages.

The new plant is slated to focus on producing chips with older technologies, rather than the next-generation processors that TSMC is best known for supplying companies such as Apple, AMD, Nvidia and Qualcomm. That’s particularly important given that it’s those older chips – like the ones found in cars to control airbags and seat belts or the power management chip in an iPhone – that have the biggest problems with supply.

But it will still be a while before the new factory comes online, and production is not expected to start until “late 2024.” TSMC is also finalizing plans for the new factory, with CEO CC Wei noted on the company’s earnings call that the new Japan factory still needs approval from the TSMC board.

TSMC had previously warned in April that the shortage could last until 2022. Wei then noted: “In 2023, I hope we can offer more capacity to support our customers. At that point, we’ll start to see the supply chain tension release a bit. “Intel CEO Pat Gelsinger has also echoed concerns about the 2022 supply, telling the BBC in July that it would be “a year or two” before the shortage ends. And while AMD CEO Lisa Su was more optimistic when speaking at the 2021 Code Conference, she also noted that supply for at least the first half of the year will be “likely in short supply.”

TSMC is also reportedly increasing the prices of its semiconductor products by around 10 percent for its advanced chips, and by about 20 percent for its less advanced products (the kind of chips that Japan’s new factory is destined for). to help increase the offer) to try. both to reduce demand and to help finance your planned investments.

And investing to expand its capacity to meet that growing demand, and help prevent future shortages, is a key priority for TSMC. The company has already announced plans to invest $ 100 billion through 2023 to increase its manufacturing capacity, which includes its planned $ 12 Billion Manufacturing Center in Arizona and the new fab from Japan.

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