CHIP SHORTAGE TSMC CEO predicts chip shortages through 2025

Related Vendors

AIC Europe GmbH

CISSOID S.A.

MBS - Hodde GmbH & Co. KG

TSMC CEO C.C. Wei predicts the AI chip shortage will persist until 2025 or 2026, correcting previous estimates by former chairman Mark Liu who expected a resolution by 2024.

The CEO of Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest contract chipmaker, has predicted that the AI chip shortage will continue through 2025 and possibly until 2026. In a TSMC Q2 earnings call on July 18, C. C. Wei said that he was “working on the problem” despite customer demand being so high. “I hope in 2025 or 2026 we can reach the balance,” he said.

The comments corrected previous statements made by former chairman Mark Liu in September 2023 when he predicted 2024 as the year AI chip shortages would end for the company. At that time Liu clarified that it was the packaging, not the chip itself, that created the shortage.

Wei confirmed that the bottleneck remains in the CoWoS (Chip-on-Wafer-on-Substrate) packaging capacity, which is essential for linking processors to high-bandwidth memory (HBM). "From last year to this year, we have more than doubled the CoWoS capacity," Wei said, adding that the company plans to double it again next year.

CHIP SHORTAGE NEWS

The global semiconductor crisis: A review of Q2 2024

As part of the shortage solution, Wei said TSMC was working with overseas partners to increase supply and support customers. The company is currently building new plants in Arizona and Kumamoto, Japan, with funding from partner investors and government subsidies. Wei assured that these expansion plans remain unchanged despite recent comments by U.S. Republican presidential candidate Donald Trump.

In a recent interview with Bloomberg, Trump claimed that Taiwan “doesn’t give [the U.S.] anything,” and that Taiwan should “pay” the U.S. to defend it. The comments sent TSMC's share price down almost eight percent on the New York Stock Exchange.

On today's TSMC earnings call, Morgan Stanley's Charlie Chan noted that Trump "talked about... Taiwan/TSMC" taking 100 percent of the chip business from the US, quipping: "So congrats on the positive high market share." Chan added: "Concern is growing that the US continues to depend on our island/ TSMC, [for] chip production. So, our question is for shareholders, right, how TSMC is going to mitigate this potential geopolitical risk?.... And maybe a technical question ... if we are shipping a chip to US customers, do we need to pay for the US tariff?"

Wei responded to clarify that so far, TSMC has not changed any of their original expansion plans and that the Arizona fab will still be going ahead.

Power Electronics in the Energy Transition

The parameters for energy transition and climate protection solutions span education, research, industry, and society. In the new episode of "Sound On. Power On.", Frank Osterwald of the Society for Energy and Climate Protection Schleswig‐Holstein talks about the holistic guidance his organization can provide.

Listen now!

(ID:50126153)