Wednesday , June 16 2021

The largest chipmaker in the world invests $ 2.89 billion to increase capacity / Global semiconductor shortage severely affects automotive industry



The board of directors of Taiwan Semiconductor Manufacturing Co. Ltd (TSMC) approved a $ 2.89 billion increase in spending to increase production capacity, the world’s largest contact chip maker said on Friday, Reuters reported.

Thus, the company responds to the global shortage of semiconductors that particularly affects car manufacturers.

The board approved the spending “for the purpose of installing advanced technology capabilities,” the Taiwanese company said in a statement, which did not provide additional information.

TSMC, whose customers include U.S. giants Apple Inc. and Qualcomm Inc., said they are working hard to increase productivity and reduce chip shortages worldwide, but supply problems are likely to continue into 2022.

TSMC announced this month that it plans to invest $ 100 billion over the next three years to increase capacity at chip plants.

Taiwan’s central role in chip production came to light during the Coronavirus (COVID-19) pandemic, when there was a significant increase in demand for chips from smartphone, video game and other tech companies. Companies such as TSMC benefit from this request.

This year, TSMC shares rose nearly 10% to a market capitalization of approximately $ 542 billion. In May, the company announced plans to build its own $ 12 billion plant in Arizona, USA.

Foreign governments and companies are also pushing Taiwan to resolve the automotive chip crisis. Automakers around the world, including Renault, Ford Motor, Subaru Corp., Toyota Motor Corp., Volkswagen AG, Nissan Motor and Fiat Chrysler, are closing assembly lines due to a lack of chips for the automotive industry.

This lack of chip supply, which affects automakers around the world, is the result of a combination of factors. Automakers closed factories for two months during last year’s COVID-19 pandemic and canceled chip orders.

At the same time, however, demand for chips has grown in the electronics industry, as people have been forced to stay home, leading to increased sales of laptops and video game consoles. Now car manufacturers have to compete for brands with electronics manufacturers.

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