TSMC says the global chip crisis may be easing

Taiwan Semiconductor Manufacturing Company (TSMC) said that automakers expect chip supply to rise sharply in the next few weeks, indicating that the global shortage may have passed the most serious stage.

In the first six months of 2021, TSMC The world’s largest contract chip maker told investors on Thursday’s earnings call that its output of micro-control units has increased by 30% compared to the same period last year, which is an important part of automotive electronics. It added that the MCU output for the whole year is expected to be 60% higher than in 2020.

“By taking these actions, we expect that starting this quarter, the shortage of TSMC customers will be greatly reduced,” said CC Wei, TSMC’s chief executive officer.

TSMC’s announcement was made in more than nine months Severe shortage of chips, Which disrupted global automobile production. The crisis started when automakers cancelled orders for chips last fall, causing them to have no supply when there was a sudden surge in demand a few weeks later.

Analysts have recently raised their outlook for automotive chip supply.

IHS Markit said in a report in late June that the interruption in the third quarter is expected to subside. It reads: “We expect an improvement in the first or second quarter because people have a better understanding of the situation and are working hard to increase visibility in a very complex supply chain.”

“We saw evidence of this in some of the more lenient announcements made by General Motors, which started operations earlier than originally planned, and Toyota’s Continuous commitment to its planning. “

JPMorgan Chase analysts estimate that the number of cars produced by global automakers due to semiconductor shortages in the third quarter will fall to 399,000 from 1.9 million in the second quarter.

In order to boost confidence in long-term supply security, TSMC said it is ready to continue to invest in mature production technologies, and the supply of automotive chips mainly depends on these technologies.

“Our recent strategy at the mature node is to work more closely with our customers to create professional solutions; we expect this structural demand will continue,” said TSMC Chairman Mark Liu. “We will focus our investment on professionalism. For the expansion of manufacturing green space, we do not rule it out, as long as the demand can justify it.”

TSMC’s smaller Taiwanese competitor, United Microelectronics, announced a major move earlier this year Expand its manufacturing capacity 28 nanometers is one of the most important nodes in the production of automotive chips.

TSMC’s willingness to reinvest in old technology runs counter to past practices and is part of a broader strategic adjustment. Liu also announced that the company is ready to invest in more new manufacturing plants or wafer fabs in countries other than Taiwan.

“Several projects are still under planning,” Liu said, adding that, in addition to the US$100 billion capital expenditure designated by TSMC for the next three years, investment in any of these projects will increase.

The company said that since it will start production in 2024, it does not rule out expanding its manufacturing base in Arizona beyond the $12 billion fab. TSMC also announced that it is conducting due diligence on a proposal to build a special semiconductor fab in Japan. Previously it was only considered for research and development.

Liu said that although TSMC will continue its policy of starting cutting-edge technology production in Taiwan and maintaining research and development, the demand for semiconductor infrastructure security makes a more diverse manufacturing footprint necessary, “to maintain and enhance our competitive advantage and more Serving our customers well in the new geopolitical environment”.

TSMC announced on Thursday that its net profit for the second quarter was NT$134.4 billion (US$4.8 billion), a year-on-year increase of 11.2%. It forecasts revenue growth in the third quarter of 21% to 23%, slightly higher than the second quarter.

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