Computers

TSMC Expects Chip Shortages Into 2022, Ups CapEx to $30 Billion

TSMC this week published its financial results for the first quarter and shared some of its expectations regarding the ongoing chip shortage. The company believes that chip shortages will continue well into 2022 and will only ease in 2023. Meanwhile, TSMC will provide some additional allocation for automakers shortly to boost supply to the clients that are important for the economies of counties like the U.S. and Germany. Also, TSMC intends to increase its capital expenditures beyond the planned $28 billion in 2020.

Supply Crisis to Ease in 2023

TSMC operated at an “over 100% utilization” during the quarter, though it could not fulfill all of its customers’ orders. When asked about expectations when the shortages were going to end, the management responded that it expected the deficit to persist throughout 2021 and into 2022. It is impossible for TSMC to quickly respond to growing demand as it has to buy land, prepare the sites, construct new fabs, procure manufacturing equipment, install these tools, and ramp up the facilities. All of these steps take a long time, and TSMC expects its supply abilities to improve tangibly only in 2023. 


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