Taiwan Semiconductor Manufacturing Company (TSMC) is set to invest $100bn to address shortages of semiconductors over the next three years.
In a quarterly earnings call, CC Wei, CEO of TSMC, told investors the funds would “increase capacity to support the manufacturing and R&D of leading-edge and specialty technologies”.
Wei said the firm had acquired land and equipment and had started construction on new facilities, adding “thousands of employees” would be hired to help ramp up capacity.
“We are witnessing a structural increase in underlying semiconductor demand as a multi-year megatrend of 5G and HPC-related applications are expected to fuel strong demand for our advanced technologies in the next several years. Covid-19 has also fundamentally accelerated the digital transformation, making semiconductors more pervasive and essential in people's lives,” he said.
“In addition, the need to ensure supply security is creating short-term imbalance in the supply chain, driven by supply chain disruption due to Covid-19 and uncertainties brought about by geopolitical tensions.”
Wendell Huang, chief financial officer at TSMC, added: “Amidst the lingering macro and supply uncertainties, we expect our customers and the supply chain to gradually prepare higher levels of inventory throughout the year as compared to the historical seasonal level.
“We expect this to persist for a period of time given the industry's continued need to ensure supply security.”
Securing the semiconductor supply chain is a priority for many nations as the rollout of 5G followed by the Covid-19 pandemic led to a demand surge.
Last month, the European Union set out a target to produce 20% of world semiconductor output by 2030, while US president Joe Biden ordered a review into the supply chain of semiconductors as a result of the shortages.
Meanwhile, major chip supplier Renesas said it would restore full production capacity at one of its plants by the end of May, after a fire burned an area of 600 sq metres and destroyed 23 machines.
Hidetoshi Shibata, Renesas CEO, said while half of the Naka plant line's capacity should be restored by the end of April, it would still take around 70 days more to return to full production.
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