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Apple supplier TSMC today said it is doing all it can to increase productivity and alleviate the worldwide chip shortage, but that tight supplies will likely continue into next year (via Reuters).

tsmc_semiconductor_chip_inspection_678x452.jpg

The comments followed a reported 19.4% rise in the Taiwanese firm's first-quarter profit, which beat market expectations, thanks to strong chip demand and a global shift to home working.

TSMC did not mention Apple specifically, but it is a major Apple supplier and this suggests that the ongoing chip shortage could continue to impact Apple. TSMC produces A-series chips for the iPhone, iPad, and Apple silicon chips for the Mac. Foxconn, another Apple supplier, said in March that it expects the global chip shortage to extend into the second quarter of 2022.

An earlier report claimed Apple is facing a global shortage of certain components for some of its MacBook and iPad models, which is causing the Cupertino tech giant and its suppliers to postpone production of the products. Samsung is also said to be feeling the impact in its production of OLED displays, which Apple uses in its iPhones.

The ongoing chip shortage was caused by supply chain issues that arose during the global health crisis and weather-related events like the freeze in Texas that shut down Austin chip plants.

As chip factories struggled to keep up with standard outputs during the pandemic, demand surged as people purchased devices for an at-home lifestyle, leading to higher prices. As a result, electronics companies bought up all available supply, leading chip makers to run at capacity.

TSMC's business was initially boosted by the shortage, but it is now impacting manufacturers of high-performance computing (HPC) products like smartphones and laptops.
"Our first-quarter business was supported by HPC-related demand, balanced by a milder smartphone seasonality than in recent years," said Vice President and Chief Financial Officer Wendell Huang, referring to high performance chips.

"Moving into second quarter 2021, we expect our revenue to be flattish, as HPC-related demand will continue to grow, offset by smartphone seasonality."
At its earnings briefing, TSMC said it expects to post revenues of between $12.9 billion and $13.2 billion in the second quarter of 2021, which is a 1% sequential increase at the midpoint.

TSMC said this month it plans to invest $100 billion over the next three years to significantly expand its production capacity to meet ever-increasing demand. The new investment came the same week that Apple reportedly booked all of TSMC's production capacity for 4nm process chips, which are expected to be used in "new generation" Mac computers.

Article Link: Apple Supplier TSMC Says Global Chip Shortage Likely to Last into 2022
 
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WoodpeckerBaby

macrumors 65816
Aug 17, 2016
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Literally every other manufacturing sector is experiencing overcapacity, yet the chips we can‘t seem to live without can‘t be fabricated fast enough. We need more collaboration and growth in this sector.
 
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wanha

macrumors regular
Oct 30, 2020
218
535
This will have minimal impact on Apple's products, because Apple is the King Kong of tech customers - they will always get preferential treatment.

On the other hand, if you were hoping to buy a PS5 this year, better make yourself comfortable while you wait for 2022 to arrive.
 

ksec

macrumors 68000
Dec 23, 2015
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Let's just get one thing straight. ( Somehow Mainstream media likes to keep repeating the same narrative ) It doesn't impact "Apple Silicon". There are no seriously shortage of leading edge 5nm Capacity unless Apple all of sudden decide to sell 150M iPhone 12 / 13 from their usual ~100M.

It impact Apple because other component within their devices are all made in TSMC. ( Not Qualcomm Modem... yet ) And those may not be in a good position to find capacity.

But I am willing to bet Apple and TSMC will smooth these out specific to Apple's order behind the sense. What is the point of having enough A14, when you dont have enough of other component holding you back. Basically it will be the rest of the industry that suffer most.

If people dont understand how this work, just look back at Toilet paper during the pandemic. It is the same thing, roughly described as Bullwhip effect.

 

RedTheReader

macrumors regular
Nov 18, 2019
210
409
I’m not happy, but I’m also not surprised. This is what happens when everyone puts their eggs in one basket.

It would’ve been nice if Intel was still competitive with their fabs so that they could’ve offloaded some of the overall demand (by retaining more of the customers that are moving to AMD in both desktops and laptops).
 
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Glideslope

macrumors 604
Dec 7, 2007
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This is precisely what happens when the competition can't keep up. Intel and Global Foundries were needed to keep this from happening.

Intel yes, but Global Foundries is a Train Wreck. Has been since day one. One of our sons started there as a Process Engineer right out of college. He knew after one year it was a tunnel with no light at the end. While the he now a Process Engineer in CVD Nanocoatings for his current employer he still knows the Wafer Industry well. He doubts Global Foundries can ramp up any time soon. People simply will not take positions there.
 
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Yammabot

macrumors regular
May 15, 2017
117
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Can’t understand why another chip manufacturing plant hasn’t shown up yet? Competition? Let’s drive prices down and innovation up not create another bloated company.
 
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Sasparilla

macrumors 68000
Jul 6, 2012
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Can’t understand why another chip manufacturing plant hasn’t shown up yet? Competition? Let’s drive prices down and innovation up not create another bloated company.

Because it takes years to plan and build out chip fabrication factories and TSMC is ahead of everyone else in the industry despite money and effort (Intel just released their latest desktop chips at the same size 14nm they had when the iPhone 6s came out). Intel had originally planned on going to 10nm in 2015. Samsung is having trouble with their latest process (this is why nVidia gpu's are barely a trickle) that is actually slightly bigger (less advanced) than the one TSMC has been using on the iPhone 12's CPU. Seems its alot of art in there with the science.

Demand went way up with everyone at home as well (and you can't build chip factories that quick). In amongst this the U.S. government (prior admin) restricted use of the big Chinese fab company (don't remember the name) so that took some capacity away. Bit of a train wreck looking at it all.
 

mnsportsgeek

macrumors 68040
Feb 24, 2009
3,120
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This will have minimal impact on Apple's products, because Apple is the King Kong of tech customers - they will always get preferential treatment.

On the other hand, if you were hoping to buy a PS5 this year, better make yourself comfortable while you wait for 2022 to arrive.

Ya, Apple will just pay more to get to the front of the line. This is bad news for the auto industry and other companies on tighter margins.
 

crawfish963

macrumors 6502a
Apr 16, 2010
823
1,164
Texas
This will have minimal impact on Apple's products, because Apple is the King Kong of tech customers - they will always get preferential treatment.

On the other hand, if you were hoping to buy a PS5 this year, better make yourself comfortable while you wait for 2022 to arrive.
There are already substantial rumors that Apple's iPhone, iPad, and Watch supply chain will likely be affected this fall.
 

ksec

macrumors 68000
Dec 23, 2015
1,766
1,896
Can’t understand why another chip manufacturing plant hasn’t shown up yet? Competition? Let’s drive prices down and innovation up not create another bloated company.

Drive Price Down? Seriously? Wafer Price from TSMC is "ridiculously" inexpensive, if not cheap for what is on offer.

Bloated Company? Seriously? TSMC innovation and efficiency is unrivalled in the industry.
 
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rp2011

macrumors 68000
Oct 12, 2010
1,956
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When you are in demand, about the only game in town for 5nm, boys coming to the yard for your milkshake, it’s time to milk them.
 

Mr. Dee

macrumors 68040
Dec 4, 2003
3,088
4,868
Jamaica
I’m glad my next upgrades won’t be until 2023, hopefully by then things will return to normal.
 

velocityg4

macrumors 603
Dec 19, 2004
6,062
2,726
Georgia
Can’t understand why another chip manufacturing plant hasn’t shown up yet? Competition? Let’s drive prices down and innovation up not create another bloated company.

Because it takes several years to build a plant. Also Samsung is the only company with manufacturing processes to compete with TSMC. Intel fell quite a ways behind and is third.

Even then. There's also shortages of base components. Even if TSMC built ten new factories. They wouldn't have the base parts needed to build much more.

Plus the companies who supply manufacturing equipment. Are at capacity. Trying to supply the manufacturing equipment these new factories need. So, even if a bunch of companies tried to break ground on new factories. There wouldn't be the manufacturing equipment to run them.

As long as smartphones, AI and crypto mining are in demand. I don't expect much alleviation. More 5nm should reduce problems for a little while. Once 4nm and 3nm factories come on line. There'll be another crunch. As everyone will want to use them instead.
 

Yammabot

macrumors regular
May 15, 2017
117
85
Northern NJ
Ok, so no one has their thinking cap on, 5 years ago did anyone think about 2 maybe 3 companies supplying the world with chips and think that’s not enough? Demand is rising every year and all things digital will grow every year. As good as TSMC are they clearly can’t handle all the demand so start ramping up a competitor. As for pricing just look at the inventory out there and see what your paying for things, if you can get anything at all. I purchased a printer for 3 times what it cost me a few years ago and had to hunt one down because no one had one. Every time I’d ask why the answer was don’t you know there is a chip shortage? Am I the only one that thinks ahead, is there no vision amongst the CEO’s whom are making millions of dollars a year?
 

Sander

macrumors 6502a
Apr 24, 2008
505
40
Ok, so no one has their thinking cap on, 5 years ago did anyone think about 2 maybe 3 companies supplying the world with chips and think that’s not enough? Demand is rising every year and all things digital will grow every year. As good as TSMC are they clearly can’t handle all the demand so start ramping up a competitor. As for pricing just look at the inventory out there and see what your paying for things, if you can get anything at all. I purchased a printer for 3 times what it cost me a few years ago and had to hunt one down because no one had one. Every time I’d ask why the answer was don’t you know there is a chip shortage? Am I the only one that thinks ahead, is there no vision amongst the CEO’s whom are making millions of dollars a year?

The semiconductor industry has a huge barrier to entry. Even if your "visionary" CEO would reach the conclusion "yeah I'll start a new foundry", once he priced together a nice setup on webshop.asml.com, he would probably think again. And besides, the other armchair visionary is telling him that he should "simply build a big pharma factory" because that's where the real money is.
 
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