Mark Liu, chairman of Taiwanese foundry TSMC, was speaking at a Taiwan Semiconductor Industry Association (TSIA) in Hsinchu, Taiwan in his role as chairman of the TSIA. A key point Liu made was that if entire semiconductor supply chains were replicated in the US and in Europe it would lead to a large amount of "non-profitable capacity."
Liu was also reported saying that some part of the current chip supply shortage is the result of double-booking of orders prompted by uncertainty in 2020. That uncertainty in turn came from the Covid-19 pandemic and rushed orders as smartphone makers tried to fill a gap left by the blacklisted Huawei Technologies.
"Uncertainties led to double booking, but actual capacity is larger than demand," Liu is reported saying. How quickly the supply chain dysfunction persists depends on progress in US-China negotiations, he added.
Liu said TSMC has the manufacturing capacity to meet the high demand for artificial intelligence and 5G applications. He also said TSMC is able to spot double-ordering and can differentiate between orders that are urgent and required to keep factories operating, and those that are for being stock-piled for inventory.
TSMC has said it plans to spend $100bn over the next three years to expand chip manufacturing, including a campus of six fabs in Arizona. This would be a dramatic increase from the already market-leading $28bn annual capital expenditure that the company has planned for 2021. It also comes after Intel has committed to a $20 billion multiyear spend to create two wafer fabs.
Related links and articles:
- Reports: TSMC planning for six wafer fabs in Arizona
- Intel to build two wafer fabs, be foundry for Europe
- "Go big" for European chip sovereignty, says Silicon Saxony
- TSMC has no "concrete" plans to make chips in Europe
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