The chip shortage has impacted manufacturing operations all around the world. Industries that have been particularly impacted include US-based technology and automotive manufacturers. Automakers, including Ford and others, have been forced to produce vehicles missing critical microprocessors due to the shortage. This has left automakers unable to ship many vehicles and has impacted sales.
Last week, Taiwan Semiconductor Manufacturing Co Ltd announced that it plans to build new factories in the US and Japan. The new factory in the US comes on the heels of increasing demands by US manufacturers to build the chips on American soil. TSMC and other semiconductor manufacturers have seen unprecedented demand for their products amid the pandemic while production globally has decreased.
TSMC has also announced it will expand production capacity in China and hasn’t ruled out a “second phase” expansion at a factory it already has in operation in Arizona. So far, it has invested $12 billion into its Arizona manufacturing facility. TSMC is the largest chipmaker in the world and counts Apple among its major customers.
The company said that it was also considering setting up a special technology wafer fabrication plant in Japan. TSMC chairman Mark Liu has said that the company is expanding its global manufacturing footprint to sustain and enhance competitive advantages and better serve its customers. However, the executive did note that the overseas fabrication facilities cannot match the costs of manufacturing operations in Taiwan.
Manufacturing semiconductors in countries like Japan or the US will cost significantly more than manufacturing them in Taiwan, likely leading to cost increases for the products they are used in. TSMC is planning a capacity expansion at a plant in China due to demand. That plant uses 28 nanometer semiconductor manufacturing technology and, when expanded, could produce 40,000 wafers per month by the middle of 2023.