Chip manufacturer TSMC warns shortages could continue through 2022

TSMC, which makes processors for Apple, Qualcomm, AMD, and numerous other big consumer tech companies, has warned that chip shortages could last through 2022. “We see the demand continue to be high,” TSMC CEO C. C. Wei said in comments reported by Bloomberg, “In 2023, I hope we can offer more capacity to support our customers. At that time, we’ll start to see the supply chain tightness release a little bit.”

Wei’s comments mirror predictions made by Intel’s new CEO Pat Gelsinger earlier this week, who warned that it could take a few years to address the shortage, The Washington Post reported. “It just takes a couple of years to build capacity,” Gelsinger said. Likewise, Nvidia’s CFO Colette Kress recently said the graphics card manufacturer expects “demand to continue to exceed supply for much of this year.”

The global chip shortage has impacted everyone from automakers to games console manufacturers. Car manufacturers have had to scale back production, while anyone looking to upgrade their gaming setup has struggled to find stock of new graphics cards, CPUs, PS5s, and Xboxes.

TSMC does have good news for its automaker clients, saying they could expect chip supply to improve next quarter. But comments from TSMC, Intel, and Nvidia suggest that the broader shortages are unlikely to abate anytime soon.

TSMC says it’s already running its fabs at “over 100 percent utilization,” but in the medium term it’s increasing investment in new production. “We have acquired land and equipment, and started the construction of new facilities. We are hiring thousands of employees and expanding our capacity at multiple sites,” Wei said in comments reported by Reuters.

TSMC now plans to invest $30 billion on upgrading and expanding its production capacity this year (up from a previous forecast of between $25 and $28 billion). It reiterated that construction at its $12 billion Arizona plant is still scheduled to begin this year. Overall, the company plans to invest $100 billion to increase capacity in its plants over the next three years.