TSMC expects chip shortages to persist until 2022

Chip manufacturer TSMC says current chip shortages are likely to persist until 2022. The company says it wants to increase production, but does not think it can solve the shortages quickly.

TSMC’s CEO CC Wei told analysts, according to Reuters, that it is now building multiple new plants, hiring thousands of additional workers and expanding capacity at multiple existing plants. For the time being, however, it will not ensure that the chip shortages will be solved quickly, Wei thinks.

In large part, this would be because customer companies would want to acquire more inventory to ensure supply stability, Wei said. Due to uncertainties in world politics and the pandemic, these companies would have less confidence that the supplies of chips will remain stable and therefore opt for larger stocks. The chip manufacturer does expect TSMC’s chip shortages for the auto industry to be a lot smaller next quarter.

Wei spoke to analysts as part of TSMC’s quarterly report. The manufacturer had a turnover of 10.8 billion euros and a net profit of 4.1 billion euros. Nearly half of that revenue came from manufacturing the 7nm and 5nm nodes.