TSMC: Shortage of Commodity chips disrupting Industries

Many chips are used by modern machines to enable their sophisticated functionality. This is hardly surprising because electronic components, particularly logic chips, are used by practically all modern gadgets. But there is an issue, as the absence of inexpensive commodity chips can prevent the delivery of a $50,000 automobile or a $150 million lithography scanner.

According to Statista, the worldwide vehicle manufacturing sector generated $2.86 trillion in revenue in 2021. There are currently hundreds of chips in every car, and as cars become autonomous, that number is expected to rise to over 1,500.

Many chips are used by modern machines to enable their sophisticated functionality. This is hardly surprising because electronic components, particularly logic chips, are used by practically all modern gadgets. But there is an issue, as the absence of inexpensive commodity chips can prevent the delivery of a $50,000 automobile or a $150 million lithography scanner.

“When carmakers told me previously that they were short of semiconductors, I thought, ‘How come these guys couldn’t understand the importance of chips,'” said CC Wei, chief executive of TSMC, at an event in China, reports New Kerala.

But later, TSMC’s own equipment suppliers suffered delivery problems and told me it is also due to component and chip shortages.

According to Statista, the worldwide vehicle manufacturing sector generated $2.86 trillion in revenue in 2021. There are currently hundreds of chips in every car, and as cars become autonomous, that number is expected to rise to over 1,500.

Snowballing demand for semiconductors will ultimately cause companies like TSMC to add new production capacity, raising semiconductor costs overall. As a result, actual good prices will also rise. Meanwhile, if logistics become more difficult, pricing will also be impacted. The executive of TSMC warned that as electronics become more advanced, they will also become more expensive.

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