Reuters reports that TSMC plans to expand its chipmaking capabilities with a new Japanese factory during its Q3 2021 earnings conference. This marks the latest expansion of what is already the largest chipmaker in the world. The company warns that there will be a shortage of chips in 2022, and this news is good news.
Instead of producing cutting-edge processors like those that TSMC is most known for, the new plant will focus on making chips with older technologies. This is especially important because older chips, such as those used in cars to control airbags and seatbelts, or the power management chip inside an iPhone, are the ones that have the most supply problems.
It will still take some time before the new fab is online. Production is not expected to begin until 2024. CEO C.C. TSMCs board still has to approve the new Japan fab, Wei stated on the company's earnings call.
TSMC had warned in April that there could be shortages through 2022. Wei stated then that he hoped to be able to offer more support for our customers in 2023. Wei noted that at that point, we will see supply chain tightness begin to release a bit. In July, Pat Gelsinger, Intel CEO, stated that it would take a year or so before there are no shortages. While Lisa Su, AMD CEO, was more optimistic at the 2021 Code conference, she also noted that supplies for at least half the year will likely be tight.
TSMC is also reportedly increasing its prices for semiconductor products by around 10% for its advanced chips and by 20% for its lower-end products, in an attempt to reduce demand and fund future investments.
The TSMC has made it a priority to invest in its ability to meet this rising demand and prevent future shortages. Already, the company announced that it will invest $100 billion in 2023 to expand its manufacturing capabilities. This includes its $12 billion Arizona manufacturing hub and new Japan fab.
