TSMC Will Prioritize Companies Who Are Not Stockpiling Chips as It Plans to Invest $100 Billion to Increase Manufacturing Capacity
TSMC is taking various steps to deal with the ongoing chip shortage. Previously, price hikes and other measures such as prioritizing companies like Apple were being followed, but according to the latest interview, companies who are not stockpiling chips will now be considered for future orders.
TSMC Reportedly Had a Team to Collect Data Across Supply Chains to Find out Which of Its Partners Were Stockpiling Chips
TSMC’s chairman Mark Liu, in an interview with Time Magazine, commented on how his firm is dealing with the chip shortage. While injecting $100 billion to increase manufacturing capacity over the next three years seems like the right step, the move will not be sufficient as demand grows for cutting-edge wafers, so the company has to take a drastic decision.
According to the interview, TSMC accumulated a group of people who collected data to find out which of the manufacturer’s partners were stockpiling chips. While it is a prudent move to stockpile chips in the event that the shortage worsens over time, TSMC’s chairman says that such companies will not be prioritized for future orders. However, the semiconductor giant might give preference to partners who require much higher chip shipments than others, such as Apple.
Just recently, we reported that Apple has asked TSMC to increase A15 Bionic orders while scaling back on previous-generation iPhone parts. We believe the ongoing chip shortage might have forced Apple to let TSMC focus its efforts and resources towards producing more N5P wafers rather than churning out chips for older iPhones. It is also possible that the growing demand for the iPhone 13 has forced Apple to increased A15 Bionic orders.
Despite an increase in its investment, TSMC might face massive roadblocks that will force it to delay 3nm chips for Apple. The company was previously reported to have increased 5nm chip prices for Apple as it attempts to combat the deleterious effects of the shortage, even though that price jump was just 3 percent. Still, expect future products from the California-based giant to be pricier if the shortage saga does not end.
In your opinion, do you think TSMC is making the right move prioritizing companies who are not stockpiling chips? It is a gamble for such partners because they never know when their turn will arrive to receive the next shipment, but do you think it is the right decision? Share your thoughts down in the comments.
News Source: Time