TSMC investing $100bn in chipmaking facilities to plug shortages

1 Apr 2021407 Views

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The Taiwanese semiconductor giant, which makes chips for Apple, is ramping up production at its manufacturing facilities.

In a bid to remedy the global shortage in computer chips, TSMC is pumping $100bn into expanding the manufacturing capacity at its factories over the next three years.

Over the last several months, the global economy has felt the pinch of a shortage in semiconductors. Accelerated digitalisation during the pandemic has driven up demand for chips, all while new intensive technologies like 5G have come on track.

Worldwide shortages have not just impacted smartphones, laptops and consumer electronics – carmakers have felt the effect too, with General Motors, Toyota and others dialling back production schedules.

Taiwan-based TSMC (Taiwan Semiconductor Manufacturing Company) counts Apple and Qualcomm among the clients for its chip manufacturing business, but it has felt the pressure from rising demand in recent months.

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The company’s latest announcement follows a commitment earlier this year to invest around $28bn in ramping up manufacturing. The sizeable increase in investment speaks to the depth of the challenges that semiconductor manufacturing firms are facing.

“We are entering a period of higher growth as the multiyear megatrends of 5G and high-performance computing are expected to fuel strong demand for our semiconductor technologies in the next several years,” the company said.

TSMC is also building a US plant in Arizona and it’s not alone in its efforts to plug this gap. Intel announced a $20bn plan last week to expand its own manufacturing functions by building two new plants in Arizona as well. The chipmaker is also expanding its operation in Ireland, with plans to create 1,600 jobs at its Leixlip campus.

But industries aren’t out of the woods yet. Foxconn, another Apple supplier, said this week that it expects shortages to lead to a 10pc reduction in shipments. During an earnings call, its chairman Young Liu said he anticipates the bite from shortages will be felt by the industry for much of the second quarter as well.

Jonathan Keane is a freelance business and technology journalist based in Dublin

editorial@siliconrepublic.com