autoevolution
 

World’s Largest Chipmaker Has a Special Christmas Gift for European Car Manufacturers

Taiwan Semiconductor Manufacturing Co., also known as TSMC, is planning a new production facility in Europe, mostly as it wants to expand its local manufacturing power and therefore serve carmakers on the continent.
TSMC is currently the world's number one chipmaker 6 photos
Photo: TSMC
GM's Flint assembly plantGM's Flint assembly plantGM's Flint assembly plantGM's Flint assembly plantGM's Flint assembly plant
The chip shortage has wreaked havoc in the automotive industry, with carmakers heavily hit by the very constrained inventory.

Most companies, including big names like General Motors, Ford, Toyota, and others, temporarily halted production, especially as they struggled to deal with the very limited supply of semiconductors. In some cases, carmakers turned to building incomplete cars that were then moved to parking lots until the necessary chips became available.

Despite the investments in chip production, the current global inventory continues to raise particular challenges for carmakers worldwide, with most companies expecting the difficult conditions to continue throughout 2023.

TSMC, however, believes that a potential plant in the German city of Dresden would help serve European carmakers more effectively, especially as the demand in the region remains at record levels following investments in EVs and more technologically-advanced vehicles.

On the other hand, opening a new production facility in Europe is a plan that has long been on the table for the world’s number one chipmaker. However, TSMC initially pushed back such an expansion, especially due to the geopolitical tension that was caused by the war in Ukraine.

The Taiwanese company believed that the instability would affect the operations of the new plant, so it halted the initial review, trying to focus on expanding production in other markets, including the United States. In the last few months, however, more and more customers requested TSMC to start reviewing the European production facility once again, especially as this would streamline the supply chain on the continent.

A decision is all but official right now, and it seems to be just a matter of time until TSMC announces the new plant in Dresden. However, given everything could change overnight, carmakers should better not hold their breath for the new facility, as the Taiwanese firm continues to monitor the market closely.

Most car manufacturers expect the chip inventory to remain constrained in 2023, with General Motors’ CEO recently warning that the supply issues could continue even “beyond” the next year. On the other hand, tech giant Intel previously estimated that the chip crunch would come to an end in 2024.

Chip makers have been working heavily on expanding their production power in the last months. In the United States, the so-called CHIPS Act has generated massive investments in the local capacity. However, such expansion plans take years to come to fruition, with several industry experts projecting a boost in the global chip inventory to take place at some point in 2027, once all the new production lines go online.
If you liked the article, please follow us:  Google News icon Google News Youtube Instagram X (Twitter)
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.
Full profile

 

Would you like AUTOEVOLUTION to send you notifications?

You will only receive our top stories