TSMC issued early warning of tight production capacity

According to the latest report, TSMC said that a global shortage of chips is likely to continue and that its production capacity for all types of chips it manufactures will be tight.

TSMC CEO Wei Zhejia said on Thursday’s quarterly earnings call that manufacturers are expected to stockpile more chips and other components than usual after some recent major events disrupted global supply chains.

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The Russian-Ukrainian conflict and the outbreak of the new crown epidemic have brought Shanghai, a major semiconductor manufacturing center in the world, under control, bringing the latest stressors to the global supply chain.

TSMC said its suppliers, including its chip-making equipment suppliers, are grappling with labor, component, and chip woes caused by the outbreak. These suppliers have had trouble delivering equipment to TSMC since the beginning of the year, and Wei Zhejia said the impact this year appears to be limited, although the outlook for next year and beyond remains unclear, with TSMC’s production capacity “not enough to support our customers.”

Moreover, TSMC’s warning comes as it expects revenue this year to grow nearly 30% from 2021, and counts Apple and AMD as one of its biggest customers. In high-speed data processing and high-performance computing, TSMC’s chips are used in central processing units, graphics units, and autonomous vehicles. These industries could become TSMC’s main revenue contributors this year and beyond, the company said.

Furthermore, TSMC said the automaker is still looking for more access to automotive chips after more than a year of chip shortages. However, the growing demand for chips in consumer electronics markets such as smartphones and personal computers is waning.

(via)