In recent news, global leaders in the semiconductor market such as the Taiwan Semiconductor Manufacturing Co, Intel, and Nvidia have warned that the global semiconductor shortage could stretch to 2022 or 2023, despite billions in fab investments. They believe that through a huge capital is being invested in establishing the silicon manufacturing plants, the plants take time to be established and start their operations.
Until new plants begin their operations, the silicon manufacturing giants have to do with the existing plants and feel the burden of not meeting the current demand. TSMC stated that the severity of the shortage should reduce from the next quarter, but that the overall shortages will last throughout the year and likely into the next.
The Taiwanese semiconductor giant plans to spend about $30 billion on expanding production this year, cutting into its gross margins – with the company dropping to 49.5 percent from an expected 51.5 percent. The company is stated as the world’s largest contract manufacturer and is operating at its 100 percent utilization, yet fearing that it won’t be able to meet the growing demand anytime soon.
The company has customers like Nvidia, which is experiencing a higher demand for its latest Graphics processors. However, it is unable to meet the demand due to a shortage of components. Nvidia stated that “overall demand remains very strong and continues to exceed supply while our channel inventories remain quite lean. We expect demand to continue to exceed supply for much of this year.”
Intel CEO Pat Gelsinger stated that “I think this is a couple of years until you can address it.” All the tech giants are vigorously trying to fight the impending chip shortage crisis. However, it seems that it will take a couple of years to get the supply online. And the demand for high-performance gadgets doesn’t seem to die down any time soon.