Double Booking Partly Responsible For Uncertainties in Semiconductor Supply

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Mark Liu, the chairman of the TSMC, world’s largest chip foundry, has pointed towards US and Europe’s plans to expand local semiconductor manufacturing capacity for strategic independence as “economically unrealistic”

Mark Liu, Chairman, TSIA

Mark Liu, chairman of Taiwanese foundry TSMC, has delivered some very serious statements while speaking at an event organised by Taiwan Semiconductor Industry Association (TSIA). One of the statements Liu made included pointing towards the possible scenario of replicating the complete semiconductor supply chain into the US and Europe as “non-profitable capacity.” He was speaking at the event in role of Chairman of TSIA.

“Uncertainties led to double booking, but actual capacity is larger than demand. How quickly the supply chain dysfunction persists depends on progress in US-China negotiations,” Liu was reported saying.

It is to be noted here that that electronic makers worldwide are facing shortage of semiconductor chips. These chips are usually the brains behind anything and everything electronic. The supply shortage, in terms of chips, as per Liu, is partly a fault of the double bookings made for the supply of semiconductor chips. Smartphone makers, owing to the Covid 19 pandemic and blacklisted Huawei Technologies, made double orders for supply of semiconductor chips.

Xiaomi, one of world’s most selling smartphone brand, had recently noted that it was thinking of passing the increasing price of smartphones to end-consumers. Company’s CEO Wang Xiang had noted, “To be honest, we will do our best to offer the best price we can to consumers. But sometimes, we may have to pass part of the cost increase to the consumer in different cases.” He was referring towards the shortage of chips in the industry.

“How quickly the supply chain dysfunction persists depends on progress in US-China negotiations,” Liu said during the TSIA event.

The European Union, as part of its plan called 2030 Digital Compass, is aiming to produce a fifth of the total output of semiconductors by the end of 2030. EU also has plans to make its first quantum computer in the next five years. The broader plan of the European Union, includes efforts to cut its dependence on non-European technologies.

“It is our proposed level of ambition that by 2030 the production of cutting-edge and sustainable semiconductors in Europe including processors is at least 20% of world production in value,” read an EU document seen by Reuters.

TSMC, on the other hand, has plans to spend $100 bn over the next three years to expand its chip manufacturing capabilities. This plans includes a campus of six fabs in Arizona. Intel has recently committed $20 billion multiyear spend to create two wafer fabs

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