TSMC wants to solve the global chip shortages with $100 billion investment in new worldwide production facilities
Fixing the ongoing global semiconductor shortages may require considerable concerted efforts from all the important players in the market. Back in early 2021, the shortages were expected to last until Q321, but new reports now estimate the effects may linger until at least 2022. It looks like the U.S. Government’s plan to help ease the situation will not be enough. Intel already presented a $20 billion investment plan to offer foundry production capacity for other U.S. and European companies in the upcoming years. It is certainly a start, yet is it really enough to solve the shortages? TSMC might have a better plan with an investment of $100 billion for new production facilities across the world.
According to Nikkei, TSMC CEO C.C. Wei issued a letter to all the foundry clients, explaining that the $100 billion investment plan is to be rolled out over a three year period until 2023. This heavy investment comes at a price for all the current clients, though. Wei asked all foundry customers to accept full production costs, as TSMC will suspend wafer price reductions starting December 31 this year, until the end of 2022. Wei explains that “this modest action is the least disruptive option to supply chains so that TSMC can deliver our mission of providing leading semiconductor technologies and manufacturing capability to [clients] in a sustainable manner.”
This $100 billion plan will accelerate the building of new “greenfield” chip manufacturing plants in key locations across the globe, and also expand existing fabs. TSMC is well into the process of hiring thousands of new employees, plus acquiring land and advanced equipment for the new facilities. Aside from the new facility that is currently built in the state of Arizona, TSMC may look to expand into other American states, Europe and other Taiwanese cities. "The increased capacity will improve supply certainty and help protect complex global supply chains that rely on semiconductors," Wei said. "We ask for your patience as we expedite the building of new fabs and capacity."
TSMC, together with other Taiwanese chipmakers like United Microelectronics and Powerchip Semiconductor Manufacturing Corp. have agreed to answer the Taiwanese government’s call to help fast-track production and thus address the shortages that are now affecting the global car industry as well as the computer and smartphone markets.