The world’s largest contract chip maker TSMC warns global shortages of chips can last until 2022. Intel even warns this situation could last through 2022 when demand for chips. beyond production capacity.
The severe shortage of chips globally has forced many car, smartphone, laptop and home appliance manufacturers to cut production (Image: Source Today)
TSMC, the world’s largest contract chip maker, has just said the status chip supply shortage globally This could be extended until 2022. TSMC also said it is planning to invest an additional $ 100 billion over the next three years to increase the output of its existing 5mm chip and the 3mm is expected to be final test production this year to meet the increasing demand for chips around the world.
This TSMC plan is currently attracting the special attention of partners and customers such as Apple and Qualcomm. Mr. CC Wei, CEO of TSMC, said “We are hiring thousands of people and expanding our capabilities in multiple locations”.
Demand for chips, especially the next generation of chips, is booming as the trend of working from home becomes more common in the world under the effects of the pandemic, driving demand for electronics as smartphones and laptops soar.
The global shortage of chips has forced some automakers, smartphone makers, computer assemblers, and home appliance makers to cut production. . Auto maker General Motors and Ford announced plans last week to shut down plants in North America due to a shortage of chip supplies.
Meanwhile, TSMC’s profit in Q1 / 2021 reached $ 4.93 billion, up 19.4% year-on-year, much higher than observers’ forecast. TSMC forecasts 2/2021 revenue will range from $ 12.9 billion to $ 13.2 billion, compared with $ 10.38 billion in the same period last year. It also raised its 2021 revenue growth forecast to 20% from its previous forecast.
TSMC CEO CC Wei said that customers are increasingly looking to hoard more chips to ensure production stability due to geopolitical uncertainties and pandemics. Therefore, TSMC’s production activity is continuously in state “stress” during the past period. It is now increasing spending on research, development and manufacturing of new generation chips to about $ 30 billion this year, compared with $ 25 billion expected earlier this year.
Analysts now expect TSMC’s production expansion to soon meet demand for next-generation chips as 5G technology and artificial intelligence applications become more widely adopted.
Intel CEO Pat Gelsinger also shared concerns, saying that the shortage of chips in the world could last until after 2022 when demand is still outstripping production capacity. Semiconductor companies can implement some short-term solutions to ease the problem, but a full solution to the shortage problem will take longer, said Pat Gelsinger.
“I think it will take a few years until the problem is completely resolved. It takes a few years to build supply capacity.”, according to Mr. Pat Gelsinger.
US President Joe Biden holds an electronic chip during a discussion session on solving chip shortages of US businesses on February 24, 2021 (Image: Reuters)
Intel has been in discussions with auto parts manufacturers and suppliers about steps it can take to increase production of car chips in the coming months. The company also aims to start increasing the supply of additional chips within the next six to nine months. Last month, Intel announced that it would spend $ 20 billion to build two factories in the state of Arizona (USA).
Professor Willy Shih from Harvard Business School, which specializes in technology and manufacturing, says chip shortages are becoming more turbulent as manufacturers are ordering chips from multiple factories at the same time because of them. Not sure which order will be executed. Chaotic orders are leaving chipmakers uncertain where they will need to allocate supplies to meet actual demand in the short term.
In the United States, to secure more domestic chip supplies in the long term, President Joe Biden’s administration is proposing a $ 50 billion financing package to subsidize semiconductor manufacturing facilities. This proposal is currently receiving wide support from both Republicans and Democrats.
Intel CEO Pat Gelsinger and Mr. Tom Caulfield, CEO of semiconductor company GlobalFoundries said that they are calling for the US Government to support expansion of chip production in the country. About 12% of the world’s semiconductors are currently made in the United States, and Mr. Caulfield says he is campaigning to raise that number above 30%.
The US semiconductor industry argues that the federal government needs to provide more support to compete with other manufacturers in Asia. American semiconductor manufacturers often accuse Asian countries of financial support for regional manufacturers to expand production capacity.
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