Chip giant Taiwan Semiconductor Manufacturing Co. is now warning that the global chip shortage may extend into next year, following comments we had reported on in early April suggesting that prices would rise for the rest of 2021.
TSMC didn't rule out the possibility of "overbooking or an inventory correction", Bloomberg reported, but the chip giant said on its most recent conference call that “the shortage will continue throughout this year and may be extended into 2022 also.”
Recall, in early April we noted that semi chip prices were expected to rise through all of 2021. This month alone, suppliers like Japan’s top silicone producer, Shin-Etsu Chemical Co. Ltd. marked up prices between 10% and 20%, according to Caixin, who reported that growing input costs and supply disruptions could be tide that continues to push up prices.
One Jiangsu diode manufacturer said it's suppliers had raised prices five times since the second half of 2020. The hikes represented a total markup of between 30% and 40%, including a new 10% hike that came into effect last week. The same firm's inventory was at "half their normal level", Caixin reported.
Last week, we had noted that smartphone sales in China had risen in March by 67.7% despite the shortage. According to the China Academy of Information and Communications Technology, smartphone shipments were up 67.7% year over year for March. The huge comp was mostly helped along by last March's lockdowns across most of Asia due to the pandemic - despite the shortage.
Days prior to that, we were writing how the automotive industry in China had also returned back to its pre-pandemic levels - despite the shortage. Recall, the China Passenger Car Association released auto sales numbers last Friday, indicating that sales are back to levels they were at two years ago, despite still being far below the country's record set in March 2018.
But we have written for the last couple months about how the semi shortage has wreaked chaos on the auto industry - and other industries - so far in 2021.
Just weeks ago we noted that Samsung was the latest to join the chorus of companies stating they were being negatively affected by the semi shortage. The company said the current crisis is "very serious" and that it "poses a slight problem" for the electronics company heading into the second quarter. The company continues to try and address supply issues, Reuters reported that CEO and mobile chief Koh Dong-jin said at Samsung's recent annual general meeting.
Recently, we also wrote about how difficult it was becoming for U.S. companies to export chipmaking hardware to China due to trade restrictions. We also documented weeks ago how critical Taiwan would be in getting the semiconductor industry back up and running. We noted that Taiwan Semiconductor Manufacturing was rushing to try and build new facilities through the Chinese New Year in order to meet demand.
TSMC is one of the biggest suppliers of chips to company like Apple, Google and Qualcomm. As a result of a worldwide shortage in chips that was brought on due to the pandemic, they are now rushing to try and get a new factory in the southern Taiwanese city of Tainan built. Construction the new facility will take place throughout 2021, with completion expected in 2022.
Earlier in 2021 we noted that the semi situation had been turning dire and was now being referred to as the "most serious shortage in years".