Car Chip Shortage to Improve This Year, Won’t Come to an End Too Soon

TSMC says it's boosting its car chip manufacturing operations 1 photo
Photo: TSMC
The demand for electronics skyrocketed last year when the world entered a lockdown due to the global health crisis and millions of people started working remotely, and just as expected, several industries were severely hit by a lack of chips required for their products.
Carmakers, for example, have been forced to temporarily halt the production of certain models due to a shortage of chips, with foundries across the world working 24/7 to meet all orders from their clients.

TSMC, which is one of the leading chipmakers worldwide, says it expects the auto chip shortage to improve in the next quarter, though CEO CC Wei says it still won’t come to an end too soon.

TSMC is doing its part to address the chip supply challenges for our customers,” Wei has recently been quoted as saying during an earnings conference call.

Most TSMC clients are likely to build higher levels of inventory, the CEO added, and this should theoretically help carmakers deal with the shortage of chips in the short term and avoid the need for temporarily halting operations.

We expect our customers and the supply chain to gradually prepare higher levels of inventory throughout the year as compared to the historical seasonal level. We expect this to persist for a period of time,” he said, adding there’s also a risk of overbooking because, obviously, everybody wants to make sure they have as many chips as possible.

But as for when the chip shortage as a whole could come to an end, Wei isn’t necessarily too optimistic this could happen overnight.

The tight capacity of most foundries is still a problem, and TSMC’s CEO believes the whole thing could be resolved only in 2023 when new fabs and production lines are finally fully operational to help meet the demand of all clients regardless of the industry.
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About the author: Bogdan Popa
Bogdan Popa profile photo

Bogdan keeps an eye on how technology is taking over the car world. His long-term goals are buying an 18-wheeler because he needs more space for his kid’s toys, and convincing Google and Apple that Android Auto and CarPlay deserve at least as much attention as their phones.
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