TSMC, the world’s largest foundry has warned that the existing semiconductor shortages may extend into 2022, rather than resolving by the year’s end. The company revised its spending and growth targets for this year while predicting a flat second quarter. However, there isn’t all bad news. The supply of chips should start improving from the next quarter (Q3-2021), but the overall deficit is expected to last throughout the year and possibly into the next year.
We see the demand continue to be high. In 2023, I hope we can offer more capacity to support our customers. At that time, we’ll start to see the supply chain tightness release a little bit.Wendell Huang, CFO, TSMC
TSMC is anticipating investments of roughly $30 billion on capacity expansion and upgrades in 2021, having spent $8.8 billion on the same in the first quarter. Earlier, the Taiwanese foundry had forecasted spending of $28 billion on capacity expansions. The revenue for the second quarter is expected to be between $12.9 billion and $13.2 billion, beating the average expectation of $12.8 billion seen by analysts, but an increase of just 1% over the previous quarter.
The yearly revenue for the year is expected to grow by 20%, a steady increase over the 15-16% estimated earlier. The semiconductor market, excluding memory, is anticipated to grow by 21% in 2021 while the foundry segment is expected to see an increase of around 16%.
Many industry peers such as Renesas, Foxconn, and NVIDIA have already warned that chip shortages will continue through the rest of the year, if not into 2022. This includes everything from cars to smartphones to graphics and game consoles that are already hit the hardest.