Ibm 2nm ChipSource: IBM

What you need to know

  • TSMC announced plans to build a new plant in Japan to produce chips.
  • The plant is unlikely to produce chips until 2024.
  • Older chipmaking technology will be used to create chips for the automotive industry.
  • The company warns that chip supply will be tight throughout 2022.

Taiwan Semiconductor Manufacturing Co (TSMC) announced plans to build a plant to manufacturer chips in Japan during an earnings call covering Q3 2021 (via Reuters). The plant will focus on making chips with older technologies, as opposed to creating high-end processors used in flagship smartphones and other electronic devices. The resulting chips will help meet demand in the automotive industry and other sectors.

While TSMC's new plant aims to address the ongoing global chip shortage, chip production isn't expected until late 2024. TSMC is finalizing plans for the plant and still requires approval from its board.

"TSMC is working closely with our customers to plan our capacity and investing in leading edge and speciality technologies to support their demand," said TSMC CEO C. C. Wei in the earnings call.

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Wei did not share details about the upcoming factory, such as its planned capacity.

The CEO predicted chip capacity to remain "tight" through 2022. He added that TSMC's chip pricing will "remain strategic, not opportunistic to reflex [the company's] value creation."

TSMC's net profit in July-September 2021 was T$156.3 billion ($5.56 billion). That greatly exceeded the expectations of analysts, which were T$149 billion ($5.3 billion).

TSMC raised its revenue growth forecast for 2021 to close to 24% compared to its earlier forecast of 20%. The company pointed to an "industry megatrend" as the reason for the increased expectations.

Earlier this week, it was revealed the TSMC has been hesitant to respond to a request from the U.S. government regarding the company's supply chain.