TSMC expects global chip shortage to ease in the coming months

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Improvements should come even in the current quarter, according to the company CEO.

Taiwan Semiconductor Manufacturing Co. , the world’s largest contract chip maker, said it expects the chip shortage that has hampered car makers to start easing in the next few months after it ramped up its production of auto chips.

The company is on track to increase output of microcontrollers used in cars by about 60% this year compared with last, Chief Executive C.C. Wei said in an earnings call on Thursday. However, he said, the broader semiconductor shortage could persist until 2022.

A shortage of semiconductors has stymied manufacturing activity, notably in the auto industry. The chips also power products including home appliances and smartphones. But it is the auto industry that is suffering most in the ongoing chip shortage.

But as Car and Driver highlighted last month, it’s partially their own fault for canceling orders during the early days of the Covid-19 pandemic. Customers in other industries took advantage of this freed up capacity, leaving little production capacity for the auto industry.

TSMC reacts to pressure form the US and Europe

Global auto makers from the U.S. and Europe have put pressure on TSMC to give priority to their orders. Manufacturers like Ford, Chevy and Jeep having to cancel production of thousands of vehicles this year. That pressure is forcing the chip maker to negotiate with other clients to free up manufacturing capacity for auto chips. “By taking such actions, we expect the shortage to be greatly reduced for TSMC customers starting this quarter,” Wei said.

TSMC has said its revenue increased 20 percent in the second quarter compared to the same period a year earlier. Net profit jumped 11 percent.

A recent report by The Verge says the Taiwanese chip maker’s net sales now top $13.3 billion. This is according to their most recent financial report