TSMC warns chip shortage will continue into next year

Chipmaker Taiwan Semiconductor Manufacturing Company (TSMC) reiterated that it expects chip shortages to continue into next year, Bloomberg reported. The warning came as the company released its latest financial results, with net sales up nearly 20% to NT$372 billion (about $13.3 billion) compared to the same quarter last year. However, automakers should see a gradual easing of the shortage this quarter.

As the world's largest chipmaker, TSMC has received a lot of attention amid the global chip shortage, which has affected manufacturing in the automotive, mobile, computer and game console sectors. TSMC is responsible for producing most of the world's smartphone processors. It supplies chips to the world's largest technology companies, including Apple, Qualcomm and AMD, and controls 28% of the world's semiconductor production capacity, according to a recent report by Counterpoint Research.

The warning about chip shortages lasting until 2022 is broadly consistent with what TSMC said last quarter, when CEO Wei Zhejia said: "In 2023, I hope we can provide more capacity to support our customers. At that time, we will start to see a little bit of relief in the tight supply chain." Other chip companies have also issued warnings along similar timelines.

Amid ongoing shortages, all eyes are on how quickly TSMC can increase production. Bloomberg notes that the company has pledged to spend $100 billion to expand its capacity by 2023, and this year alone it expects to increase microcontroller production by nearly 60%. Last month, the company began building a new $12 billion semiconductor manufacturing plant in Arizona, and in April it confirmed it would spend $2.8 billion to expand production in Nanjing, China, Nikkei Asia reported. The company's CEO has confirmed that the company is also considering building its first chip factory in Japan.

Meanwhile, the chip shortage is continuing to have real effects on the electronics people can buy. Just this week, General Motors said it would remove wireless smartphone charging from some of its new SUVs because of supply chain challenges, and the shortage is also starting to slow shipments in the personal computer market.