TSMC is building a new chip factory in Japan, but warns of ‘tight’ supply through 2022

TSMC has introduced plans to broaden its chipmaking efforts with a new factory in Japan throughout its Q3 2021 earnings name, marking the most recent growth for what’s already the world’s largest chipmaker, through Reuters. But the information comes as the corporate additionally cautions that supply can be “tight” for chips all through 2022 as a outcome on the continuing scarcity.

The new plant is deliberate to concentrate on producing chips with older applied sciences, as an alternative of the bleeding-edge processors that TSMC is finest recognized for offering to firms like Apple, AMD, Nvidia, and Qualcomm. That’s significantly vital, provided that it’s these older chips — like these discovered in automobiles for controlling the airbags and seatbelts or the facility administration chip in an iPhone — which might be those having the largest supply points.

But it’ll nonetheless be a whereas earlier than the new fab comes on-line, with manufacturing not anticipated to start out till “late 2024.” TSMC is additionally nonetheless finalizing plans for the new factory, with CEO C.C. Wei noting on the corporate’s earnings name that the new Japan fab nonetheless wants approval from TSMC’s board.

TSMC had beforehand cautioned in April that shortages might final through 2022. Wei famous then: “In 2023, I hope we can offer more capacity to support our customers. At that time, we’ll start to see the supply chain tightness release a little bit.” Intel CEO Pat Gelsinger has additionally echoed considerations about 2022 supply, telling the BBC in July that it will be “a year or two” earlier than shortages finish. And whereas AMD CEO Lisa Su was extra optimistic when talking on the 2021 Code Conference, she too famous that supply for not less than the primary half of the yr can be “likely tight.”

TSMC is additionally reportedly elevating its costs for its semiconductor merchandise by round 10 p.c for its superior chips, and by about 20 p.c for its much less superior merchandise (the type of chips that the new Japan factory is meant to assist enhance supply of) to attempt to each scale back demand and assist fund its deliberate investments.

And investing to broaden its capability to satisfy that skyrocketing demand — and assist stop future shortages — is a key precedence for the TSMC. The firm has already introduced plans to speculate $100 billion through 2023 to extend its manufacturing capability, which incorporates its deliberate $12 billion manufacturing hub in Arizona and the new Japan fab.