Much has been speculated about the huge crisis of components implemented in multiple devices that is happening around the world. So the world’s largest chipmaker, at least by contract, plans to start a new idea. TSMC could consider starting a new plant in Singapore. If this were possible, the company would have to transfer an important part of its position to the country, so it would already be in talks with Singapore to resolve this situation.
This new plant of TSMC or Taiwan Semiconductor Manufacturing Company, according to the report, could be really important in the shortage of components. As well as a new objective relevant to this topic.
Context
This huge company was relevant because it manufactured the A and M series components, which are implemented in the Apple product line. However, TSMC has quite a few more clients and focuses, doing multiple chips of all sorts like display controllers or Wi-Fi. These types of components do not seem to be very important, but due to the shortage of components, it is really difficult for TSMC to keep up with the manufacturing.
The concept of legacy chips or legacy chip those that have maintained the situation of scarcity so aggravated, being the ones with the least production achieved. Apple is highly dependent on this type of chip, as is the entire technological field. Even due to this case of shortage, TSMC has seen revenues considerably affected, since as a direct producer of both iPhone and other devices the blow has been strong.
Meanwhile, Apple CEO Tim Cook reported the impact this situation had on revenue. The production cap on the supply line cost the company some $6 trillion in just two quarters. However, the estimate for this quarter amounts to up to 8,000 billion dollars.
Reports also report that shortages have curtailed the production of seven different categories of components. In addition to having strongly reduced four of these seven and that they will continue like this for the rest of the year.
Could a new TSMC plant come to Singapore?
The media outlet WSJ reported of a possible new TSMC plant that would be located in Singapore. This would be a plant specialized in a type of chips with more common processes, the so-called legacy chips.
According to these statements, the one entitled “Singapore project”, in principle seeks that the plant has total viability of the production lines. The approach is for the supply line to manufacture components designed from seven to twenty-eight nanometers, according to the source close to the project. The line of chips that they will manufacture will be focused on this type of technology, which can be considered as older processes although widely used for multiple devices, from smartphones to cars.
It is normal for the company to bet on the manufacture of this type of chips, as it is one of the main factors for the production line. This type of chip has been giving several problems for the supply of companies like Apple. Although the report has not actually confirmed this occurrence, yes it indicates that it is clearly in “negotiations”. Possibly the overwhelming factor is just some incentive from the government that proceeds for construction.
The new plant would have an additional objective
TSMC’s main objective is to fully focus the production of legacy chips towards the plant in Singapore. However, it would not be the only mission to fulfill, because thanks to a second base chip manufacturing would be reduced and thus relieved in Taiwan.
The current situation in Taiwan and in general in China regarding sanitary measures for COVID-19 are extremely strict, this has led to quite serious incidents. This excess, together with overproduction within a single country, could lead to much more complex problems and effects.
Due to these circumstances, it is likely that TSMC ultimately chose to establish a plant somewhere other than China, in this case Singapore. This plant would be the ideal for TSMC, which despite making the best of China’s blockades, is still stuck in component shortages with common chips.
TSMC plan continues with Arizona
TSMC doesn’t just plan to continue to cover Asia. The company continues the diversification amendment by venturing into America, building a six-story mega-construction in Arizona, USA. Although it has been a year since TSMC announced this, the plan is ready to start until 2024.
In early 2022, the Taiwanese company had some trouble going ahead with the Arizona plan, so the estimated construction date might have to be pushed back.
Finally, a report notified that for the moment, the incursion plan for the United States is already about half a year behind schedule. The source, Nikkei Asia, indicates that TSMC has not been able to solve the problems it faces in order to build the plant in Arizona. The factors that have prevented this event are mostly two: The COVID-19 pandemic that leads to infections and low labor; and on the other hand, the necessary permits for construction.
