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

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The factory will focus on the production of older chips that have the biggest supply problems

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TSMC has announced plans to expand its chipmaking efforts with a new factory in Japan during its 2021 third-quarter earnings call, which already marks the latest expansion for the world’s largest chipmaker, Via Reuters. But the news comes as the company also warns that supplies for the chips will be “tight” throughout 2022 as a result of ongoing shortages.

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The new plant plans to focus on producing chips with older technologies rather than the bleeding-edge processors that TSMC is known for providing companies such as Apple, AMD, Nvidia and Qualcomm. This is especially important, given that it’s older chips — such as those found in cars to control airbags and seatbelts or the power management chip in iPhones — that are the biggest supply issues.

But it will still take some time for the new fab to come online, as production is not expected to begin “until the end of 2024”. TSMC is still finalizing plans for the new factory, with CEO CC Wei noting on the company’s earnings call that the new Japan fab still requires approval from TSMC’s board.

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TSMC had earlier warned in April that the shortfall could last till 2022. Wei then added: “In 2023, I hope we can offer more capacity to support our customers. At that point, we’ll start to see supply chain tightness ease a little bit.” Intel CEO Pat Gelsinger has also expressed concerns about 2022’s supply chain. Tell the BBC in July That it will be “a year or two” before the shortage ends. And while AMD CEO Lisa Su was more optimistic when speaking at the 2021 Code conference, she also said that supplies will be “potentially tight” for at least the first half of the year.

TSMC is reportedly increasing the price of its semiconductor products by about 10 percent for its advanced chips, and about 20 percent for its less advanced products (the kind of chips the new Japan factory has to help increase supply). ) to try both to reduce demand and to help fund its planned investments.

And investing to expand its capacity to meet that skyrocketing demand — and help prevent future shortages — is a key priority for TSMC. The company has already announced plans to invest $100 billion by 2023 to expand its manufacturing capacity, including $12 billion manufacturing center in Arizona And the new Japan fab.

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