Multiple incidents happening concurrently, have led to a silicon shortage which is expected to last beyond 2021. And in midst of the prevailing shortage, Apple’s chip supplier TSMC (Taiwanese Semi-conduction Manufacturing Company) has reportedly prioritized Apple and automaker orders in the third quarter of 2021.
Lockdowns and social distancing orders during the COVID-19 pandemic, drought in Taiwan, and extremely harsh winter in Texas, U.S have contributed to the global chip shortage. As silicon is a major component of various electronic products, the persisting chip shortage is affecting several industries including, smart devices, computers, health-related gadgets, automobiles, and others. Therefore, President Joe Biden’s administration is providing impetus and investment to silicon manufacturers to not only end the shortage but also encourage domestic chip production.
Apple and automobile orders will be TSMC first priority amidst silicon shortage
Initially, it was estimated that Apple will not be affected by the silicon shortage but later TSMC reported that the shortage will continue till 2022 and it will increase production capacity to reduce the impact of the chip shortage, worldwide. CEO of Apple, Tim Cook confirmed, at the Q2 2021 earnings call, that silicon shortage will impact iPad and Mac production primarily and the company will see a revenue decline in the March quarter to June quarter than the previous year.
DigiTimes reports that iPhone makers long term partner has given priority to its orders, along with those of carmakers.
TSMC will give supply priorities to orders for automotive ICs and those placed by Apple in the third quarter of 2021, followed by chip orders for PCs, servers and networking devices, according to sources at fabless chipmakers.
TSMC has announced an ambitious $100 billion investment plan over the next three years to increase capacity by building at least six new factories in Arizona, U.S. The expansion is primarily accredited to high silicon demand by Apple. TMSC provides A14 and M1 chips built on the 5nm process for the iPhone 12 series and new Apple Silicon Mac models. The manufacturer is reported to deliver A15 Bionic chip for iPhone 13 and M2 chip for new Macs.