TSMC, a major chip manufacturer for AMD and Apple, is bracing for the semiconductor shortage to persist well into 2022.
CEO CC Wei expects chip supplies to remain tight for the next 18 months, despite TSMC’s plan to build new factories. “Building a fab from a green fab start and also to install the capacity, it won't be available until 2023,” Wei said during an earnings call. “And so this year and next year, I still expect the capacity tightness will continue.”
The news may not bode well for TSMC’s customers, which also includes smartphone chip maker Qualcomm. Although clients typically book chip orders months or even years in advance, Wei says TSMC is nevertheless witnessing “strong demand” for its manufacturing capabilities, which will keep chip supplies tight.
In response, the company is slated to invest $100 billion over the next three years to increase manufacturing capacity. This includes constructing a factory in Arizona capable of churning out 5-nanometer chips. But the facility isn’t expected to begin production until 2024.
Nvidia has also been hit by the chip shortage. It’s been using Samsung to manufacture PC graphics cards, including the RTX 3000 series. But product supplies may not improve anytime soon. “We expect demand to continue to exceed supply for much of this year,” Nvidia CFO Colette Kress said during the company's annual investors day earlier this week.
On a positive note, TSMC says it’s made progress on boosting manufacturing for the automotive industry, which had to slow down car production due to the chip shortage. “Together with our productivity improvement, we expect the automotive component shortage from semiconductor to be greatly reduced for TSMC's customer by the next quarter,” Wei says.