Apple Supplier TSMC Says Global Chip Shortage Likely to Last into 2022
Apple supplier TSMC today said it is doing all it can to increase productivity and alleviate the worldwide chip shortage, but that tight supplies will likely continue into next year (via Reuters).
The comments followed a reported 19.4% rise in the Taiwanese firm's first-quarter profit, which beat market expectations, thanks to strong chip demand and a global shift to home working.
TSMC did not mention Apple specifically, but it is a major Apple supplier and this suggests that the ongoing chip shortage could continue to impact Apple. TSMC produces A-series chips for the iPhone, iPad, and Apple silicon chips for the Mac. Foxconn, another Apple supplier, said in March that it expects the global chip shortage to extend into the second quarter of 2022.
An earlier report claimed Apple is facing a global shortage of certain components for some of its MacBook and iPad models, which is causing the Cupertino tech giant and its suppliers to postpone production of the products. Samsung is also said to be feeling the impact in its production of OLED displays, which Apple uses in its iPhones.
The ongoing chip shortage was caused by supply chain issues that arose during the global health crisis and weather-related events like the freeze in Texas that shut down Austin chip plants.
As chip factories struggled to keep up with standard outputs during the pandemic, demand surged as people purchased devices for an at-home lifestyle, leading to higher prices. As a result, electronics companies bought up all available supply, leading chip makers to run at capacity.
TSMC's business was initially boosted by the shortage, but it is now impacting manufacturers of high-performance computing (HPC) products like smartphones and laptops.
"Our first-quarter business was supported by HPC-related demand, balanced by a milder smartphone seasonality than in recent years," said Vice President and Chief Financial Officer Wendell Huang, referring to high performance chips.
"Moving into second quarter 2021, we expect our revenue to be flattish, as HPC-related demand will continue to grow, offset by smartphone seasonality."
At its earnings briefing, TSMC said it expects to post revenues of between $12.9 billion and $13.2 billion in the second quarter of 2021, which is a 1% sequential increase at the midpoint.
TSMC said this month it plans to invest $100 billion over the next three years to significantly expand its production capacity to meet ever-increasing demand. The new investment came the same week that Apple reportedly booked all of TSMC's production capacity for 4nm process chips, which are expected to be used in "new generation" Mac computers.
Top Rated Comments
So the capacity for the next year is fixed but the demand has increased
It impact Apple because other component within their devices are all made in TSMC. ( Not Qualcomm Modem... yet ) And those may not be in a good position to find capacity.
But I am willing to bet Apple and TSMC will smooth these out specific to Apple's order behind the sense. What is the point of having enough A14, when you dont have enough of other component holding you back. Basically it will be the rest of the industry that suffer most.
If people dont understand how this work, just look back at Toilet paper during the pandemic. It is the same thing, roughly described as Bullwhip effect.
Demand went way up with everyone at home as well (and you can't build chip factories that quick). In amongst this the U.S. government (prior admin) restricted use of the big Chinese fab company (don't remember the name) so that took some capacity away. Bit of a train wreck looking at it all.
Bloated Company? Seriously? TSMC innovation and efficiency is unrivalled in the industry.