Apple silicon supplier Taiwan Semiconductor Manufacturing Company (TSMC) has said that the global chip shortage, affecting many tech companies, may continue well into 2022.
Today, TSMC reported a strong first quarter. As reported by Reuters, TSMC saw a 19.4% rise in Q1 profits. This rise beat market expectations and is said to be attributed to the strong demand for silicon as work from home conditions continued. However, as demand increases, TSMC sets expectations by stating that the global shortage will likely continue into the new year.
As TSMC serves as one of Apple’s primary suppliers, the shortage in chips may likely have an effect on available inventory. The supplier is directly tied to the supply of Apple’s A-series chips, which help power Apple’s iPhone, iPad, as well as M-series silicon for its Mac products. Although the shortage of chips is expected to continue, Apple may be able to obtain priority access to available stock due to its close relationship with TSMC and the quantity Apple purchases. Though, this is not a guarantee.
The global chip shortage first began as supply chains struggled to adjust to the pandemic. This caused a butterfly effect that continues to this day as suppliers try to overcome those barriers. Strong demand has put pressure on chip manufacturers and lead to the swift purchase of all available supplies. These manufacturers such as TSMC have now had to run at a higher capacity in order to attempt to meet the high demand.
TSMC has stated that it will be investing $100 billion across the next three years in order to increase capacity at its plants. The company expects this will significantly help in production and catch up to the overwhelming demand. The company is also said to be increasing its capital spending toward the production and development of advanced chips. This initiative is said to be around $30 billion in 2021. This total was increased from $25 billion to $28 billion it estimated in January.