Asian chipmakers rush to expand production as prices rise

According to foreign media reports, Asian chip manufacturers such as SMIC and TSMC are expanding their production capacity to cope with the global chip supply shortage. However, due to the rapid growth in demand in various industries, the supply gap may take months to fill. At the same time, automakers such as GM, Volkswagen , and Mazda have begun to suspend some production.

SMIC CEO Zhao Haijun said that the company's 8-inch chip manufacturing plant is expected to expand its monthly production capacity by 45,000 pieces. However, due to factors such as the long equipment and raw material procurement cycle, the capacity increase will not be too fast, and the company is currently under great pressure. The world's second largest memory chip manufacturer, South Korea's SK Hynix, said that the company is accelerating the transfer of 8-inch chip production lines to China to reduce production costs.

On February 8, Renesas, one of the world's top ten semiconductor chip suppliers, also announced that it would acquire chip designer Dialog Semiconductor for approximately $6 billion to expand the production of automotive chips. At the same time, the company is currently negotiating a 15% price increase for automotive chips and a 10%-20% price increase for other chips.

TSMC said it is increasing production of automotive-related products at its wafer fabs and reconfiguring wafer capacity, and expects to raise production and R&D expenses for advanced chips to $25 billion to $28 billion in 2021, up 60% from 2020. Semiconductor wafer manufacturing company UMC plans to allocate $1.5 billion this year to purchase new equipment, up 50% from $1 billion in 2020. UMC predicts that chip prices will rise by 4% to 6% overall this year as supply shortages will persist for a long time.

Editor's comments:

At present, the main reasons for the chip supply shortage are, on the one hand, the slowdown in manufacturing due to the epidemic; on the other hand, the relatively conservative investment in production capacity in the global chip industry has failed to keep up with the recent growth in demand for electronic devices such as smart cars and smart phones. At present, the production capacity of major suppliers has reached its limit, and it is expected to take several quarters to completely alleviate the problem.