Never miss a story

Get subscribed to our newsletter


×
Taiwan Semiconductor Manufacturing Co. Chairman, Morris Chang. Wikimedia Commons

Plans by the world’s largest contract chipmakers for a record $100 billion capacity expansion will just mildly dent a growing worldwide shortage of semiconductors for gear such as high-speed notebook computers, 5G smartphones, and newer vehicles, tech experts believe.

Taiwan Semiconductor Manufacturing Co. said in an April 1 legal notice to the Taipei stock exchange that it would use the money over three years on “leading technology” for manufacturing and R&D to “answer demands from the market.” The notice specifically cites demand for chips used in 5G-enabled and high-performance devices.


That amount would set a dollar-value record for the company, which is better known as TSMC, said Brady Wang, an analyst in Taipei with the market intelligence firm Counterpoint Research.

Follow NewsGram on LinkedIn to know what’s happening around the world.

TSMC’s investment will ease “anxiety” among clients worried about semiconductor supply-chain instability caused in part by Sino-U.S. trade tension, said Kent Chong, managing director of professional services firm PwC Legal in Taipei. Its clients include multiple American hardware developers including Apple.


Global chip demand is expected to rise from $450 billion last year to about $600 billion in 2024. Pixabay

“Overall, it would indeed increase capacity, without any question,” Chong said. American clients hope to source chips in the United States, he added. The company headquartered southwest of Taipei is already planning to open a $12 billion plant in the U.S. state of Arizona. “TSMC is obviously the forefront runner in bringing the whole supply chain to the U.S.,” Chong said.

TSMC said in its stock market filing it is “working closely with our customers to address their needs in a sustainable manner.”

Years-long shortage

Analysts caution, though, that the ever-growing demand for chips paired with the lag time in building new production plants will extend the shortage for years, despite TSMC’s investment.

“You can throw a lot of money at it, but it’s not going to solve the problem,” said Sean Su, an independent political and technology consultant in Taipei.


Instead of sharing a computer, each child in the house now has one. Pixabay

He pointed to the popularity of home-use devices during the pandemic and possible long-term reliance on this technology in a “hybrid” online-offline economy after COVID-19 subsides.

“Demand is off the ceiling,” Su said. “People want smartphones. People want this and that more than ever. People want tablets all of a sudden. Every single child in the house now needs a computer instead of sharing it.”

Remote study and telework, two trends that emerged during the 2020 coronavirus outbreak, particularly raised demand last year for contract chipmakers and chips that run high-speed notebook PCs. That trend is piggybacking on pre-pandemic demand for 5G smartphones and new devices that run on artificial intelligence.

Automakers joined the mix, too, last year as they placed orders for automated vehicles and electric cars. Because of the current chip shortage, they must wait until at least early 2022 as production capacity is now “fully loaded,” said Wen Liu, industry analyst with the Taipei-based Market Intelligence & Consulting Institute.

Feeling an additional pinch

World demand for chips should increase from $450 billion last year to about $600 billion in 2024, market research firm Gartner says. Industry revenue had already grown 5.4% from 2019 to 2020, according to fellow market research company IDC. TSMC and South Korean technology giant Samsung are the biggest chipmakers today and make the highest-grade chips.


Developers of three of the world’s top five mobile brands by market share in late 2020 are among China-based chip buyers. Pixabay

Chinese semiconductor clients will feel an additional pinch because of curbs introduced by former U.S. President Donald Trump’s administration, Su said. The Trump administration barred companies, including those based offshore, from working with a list of Chinese firms considered national security risks.

“They will be [affected in China] due to trade embargoes as is,” Su said. “Every year, companies fight over limited batches of top-end processors.”

China-based chip buyers include developers of three of the world’s five biggest smartphone brands by market share in late 2020.

Most of the world’s contracts chipmakers, such as the growing China-based Semiconductor Manufacturing International Corp., lag in the equipment and know-how to make chips that run fast on low power, tech analysts believe. TSMC’s investment will help it stay ahead of any up-and-coming peers, Wang said.

ALSO READ: Advanced Malware Is Now Threatening Mobile Banking

“This is actually because [TSMC] saw a new opportunity, which would mainly be in 5G or high-performance PCs or demands for other digitization needs as that’s the demand following COVID-19,” Wang said. TSMC itself probably does not expect the planned $100 billion outlay to ease today’s chip shortage, he said.

The company says in its stock exchange notice that “multiyear mega-trends…are expected to fuel strong demand for our semiconductor technologies in the next several years,” while the pandemic “accelerates digitalization in every aspect.” (VOA/KB)


Popular

Unsplash

Robots evolve to do more work around us

As robots evolve to do more work around us, the UK-based humanoid robot manufacturer Engineered Arts has infused more human-like facial expressions into one of its robots, which may leave you with an eerie feeling.

In a video posted on YouTube, the robot called 'Ameca' displays various human expressions, like appearing to "wake up" from sleep, as its face shows confusion and frustration when it opens its eyes.

Follow NewsGram on Twitter to stay updated about the World news.

Keep Reading Show less
Unsplash

The Microsoft office

Microsoft has disrupted the activities of a China-based hacking group, gaining control of the malicious websites the group used to attack organisations in the US and 28 other countries around the world.

The Microsoft Digital Crimes Unit (DCU) said in a statement that a federal court in Virginia granted its request to seize websites of the hacking group called 'Nickel', enabling the company to cut off Nickel's access to its victims and prevent the websites from being used to execute attacks.

Keep Reading Show less
Unsplash

MediaTek's plans to boost technology democratisation and enable access to disruptive connectivity

Chip manufacturer MediaTek on Monday announced that it is focused on making 2022 a year aimed at rapid growth, business success, substantial expansion in Research and Development capabilities.

MediaTek's plans to boost technology democratisation and enable access to disruptive connectivity with its range of mainstream to flagship 5G chips.

"We at MediaTek are focused on making 2022 a year aimed at rapid growth, business success, and substantial expansion in our R&D capabilities. For 2022, we are focused on further strengthening our presence in India, offering incredible experiences to customers, and supporting the country's technology initiatives with our expertise and collaboration with leading OEMs," Anku Jain, Managing Director, MediaTek India said in a statement.

Follow NewsGram on LinkedIn to know what's happening around the world.

In the flagship segment, MediaTek recently announced the Dimensity 9000 chip, which is a milestone of innovation and a rise to the incredible, built-to-power flagship 5G smartphones in the world, the company claims.

MediaTek Dimensity 9000 features a single Cortex-X2 performance core clocked at 3.05GHz, three Cortex-A710 cores at 2.85GHz and four Cortex-A510 efficiency cores at 1.8GHz.

It packs a 10-core Arm Mali-G710 that takes care of graphics processing, the report said.

Keep reading... Show less