The world’s leading semiconductor foundry, TSMC, warns that the ongoing global chip shortage that is impacting tech companies will continue till 2022. The semiconductor manufacturer said that it will enhance productivity and mitigate a worldwide chip shortage, but tight supplies will most likely persist till next year.
Earlier this month the Taiwanese-based manufacturing company issued that it plans to invest $100 billion over the next three years to expand production capacity to meet the increasing demand for Apple’s chips. The company already planned to spend $25 billion to $28 billion this year to develop and produce chips for its clients.
TSMC says the chip shortage will last until 2022
According to Reuters, TSMC is expanding capacity and working to keep pricing reasonable. The company has acquired equipment and land and has begun construction for new facilities. In addition to that, the company has hired numerous employees and is expanding its capacity at multiple locations. But the Taiwan-based manufacturer says that the chip shortage will take a couple of years to fix.
The comments came after the firm reported a 19.4% rise in first-quarter profit, beating market expectations due to strong chip demand during a global shift to working home. TSMC did not specifically mention Apple but it is the main supplier for the tech giant and this suggests that the shortage will continue to compact Apple. TSMC manufactures A-series chips for iPhone, iPad, and Apple silicon chips for Mac.
Chief Executive Officer C. C. Wei said that the massive investment plan was made because of “stronger engagement with more customers” on the company’s advanced 5-nanometer node technology along with its upcoming 3-nanometer node which will enter trial production sometime later this year. The company has also increased capital spending on the production and development of advanced chips to about $30 billion this year.
The shares for the Taiwanese-based manufacturer have increased approximately 16% this year and have doubled compared to last year, creating a market value of $558 billion, twice of Intel and higher than that of South Korean tech giant Samsung. On Thursday, the stock rose 1.14% compared with 1.25% for the benchmark index.
The chip shortage comes amid the drought situation currently faced by Taiwan. Reservoirs are functioning below 20% capacity, and the Taiwanese-based manufacturer has put in place contingency plans to keep its plants working. This also includes deliveries of water from outside the region, reportedly truckloads of water have been sent as a test to different TSMC facilities.
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