Taiwan Semiconductor Manufacturing Co., which says it’s the world’s largest contract chipmaker, says the global chip shortage is likely to continue, with tight production capacity for all types of chips. TSMC (NYSE: TSM) expects manufacturers to stock up more than usual on chips and other components after recent events disrupted the global supply chain, Chief Executive C.C. Wei said Thursday during its Q1 2022 quarterly earnings call, according to The Wall Street Journal.
Russia’s invasion of Ukraine and the COVID-19 lockdown in Shanghai, a semiconductor production hub, are the latest factors pressuring the global supply chain. TSMC’s suppliers are struggling with labor, component and chip constraints due to the pandemic, the company said. That includes its chipmaking equipment suppliers, which have had trouble delivering tools to TSMC since the beginning of this year, Wei said.
The impact appears limited for this year, though the outlook is murky for next year and beyond, according to Wei. The company’s production capacity is “not enough to support our customers,” he said.
TSMC’s warnings come even as it forecast revenue to rise by at least nearly 30 percent this year from 2021, and posted both record quarterly revenue and profit in the first quarter. The company counts Apple and Advanced Micro Devices among its biggest customers.
In the Q1 quarter, TSMC posted net profit equivalent to about US$7 billion, reports The WSJ. That’s up 45 percent from the same period last year, driven by strong chip demand used in computers, cars and mobile phones. Its revenue increased 36 percent.
Demand for automotive chips remains solid, TSMC said, as automakers seek to secure chips that can go into their cars, after running short for over a year. Meanwhile, growth is weakening for chips used in consumer electronics such as smartphones and personal computers, according to TSMC.
TSMC is scheduled to debut its most advanced chip-making technology in the second half of this year, reports The WSJ. The first group of customers includes Apple and Intel, analysts said. About half of TSMC’s revenue comes from leading-edge technology chips, according to company data.
Apple and Intel didn’t respond to requests for comment.
By Leslie Stimson, Inside Towers Washington Bureau Chief
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