TSMC warns of continued chip shortages until 2022

announced Taiwan semiconductor maker TSMC announced plans to expand its chipmaking efforts with a new factory in Japan as it reports third-quarter earnings of 2021, marking the latest expansion of what is the world’s largest chipmaker.

But the news comes as the company also warns that supply could be tight for chips throughout 2022 as a result of persistent shortages.

The new plant was planned to focus on producing chips with older technologies, rather than the high-end processors that Taiwan Semiconductor Corp. is known to provide to companies such as Apple, Nvidia, Qualcomm and AMD.

This is important, given that it’s those older chips — like those in cars to control airbags and seat belts or the iPhone’s power management chip — that have the biggest supply problems.

But there is still some time before the new plant becomes operational, as production is not expected to begin until late 2024.

Taiwan Semiconductor Corporation is also still finalizing plans for the new plant. The company indicated that the new Japanese plant still needs approval from the board of directors of Taiwan Semiconductor Industry Corporation.

Taiwan Semiconductor Corporation warned in April that the shortage could continue until 2022.

Intel CEO Pat Gelsinger has also expressed concerns about supply in 2022. He said in July that it would take a year or two before the shortage was over.

While AMD CEO Lisa Sue was more upbeat, she also noted that supply in the first half of the year at least is likely to be tight.

Read also: Chip shortage disrupts General Motors factories

TSMC builds new chip factory in Japan

TSMC is also said to be raising prices for its semiconductor products by about 10 percent for its advanced chips. It also raised prices by 20 percent for its less advanced products. This is to try to reduce demand and help finance its planned investment.

Investing to expand its capacity to meet this growing demand and help prevent future shortages is a major priority for the company.

TSMC announced plans to invest $100 billion through 2023 to increase its manufacturing capacity. That includes the planned $12 billion manufacturing center in Arizona and the new Japanese factory.

TSMC reported a net profit of $5.56 billion in the July-September period. Its revenues for the second quarter increased by 22.6 percent to reach $14.88 billion.

Read also: Tech giants rush to develop special chips