Ron.s

Maybe some good news….

Taiwan Semiconductor Manufacturing Co. TSM -5.51% , the world’s largest contract chip maker, said it expects the chip shortage that has hampered car makers to start easing in the next few months after it ramped up its production of auto chips.

The company is on track to increase output of microcontrollers used in cars by about 60% this year compared with last, Chief Executive C.C. Wei said in an earnings call on Thursday. However, he said, the broader semiconductor shortage could persist until 2022.

A dearth of semiconductors, used in products including home appliances and smartphones, has stymied manufacturing activity, notably in the auto industry. That shortfall should be greatly reduced for TSMC customers in the current quarter, Mr. Wei said.

Global auto makers from the U.S. and Europe have put pressure on TSMC to give priority to their orders, forcing the chip maker to negotiate with other clients to free up manufacturing capacity for auto chips.

Ron.s

I might add that this may not solve all of the shortages. Reportedly there will still be shortages of the lesser chips used for other functions.

Lucky 777

Of course as soon as China sends troops in to Taiwan, all bets are off.

makris0000

That's a good sign. I just hope inventory goes back to normal by early 2024 when my lease is up.

Ron.s

Mercedes has an ambitious plan with Nvidia set for 2024…in Tech speak that might be 25 or 26. Taiwan Semi is the primary source for Nvidia chips so China is lurking in the background as Lucky pointed out. Maybe that’s why TSM is building a new plant in China…to appease China just in case. China might control the world if we don’t get more chip alternatives in the US or other Democratic countries.

https://blogs.nvidia.com/blog/2020/0...ined-vehicles/

mikapen

Lots of stuff going on as chip manufacturers start building fab plants in the US. Here's TSMC's AZ plant, a 5, then 3nm fab.
https://www.cnbc.com/2020/05/15/tsmc...p-factory.html
https://www.reuters.com/technology/e...er-2021-05-14/

Ron.s

It will take a long time to make a dent. I just read that China hit a billion a year in chip manufacturing. If/when they take over Taiwan they will have almost total control. Intel is rumored to be trying to buy Global Foundries, an inefficient outdated Co.

mikapen

I hear that chip makers are re-negotiating with their non-auto customers, who moved ahead in the supply line, when automakers in general underestimated recovery demand and cancelled their chip orders.
If this is true, and Autos move back up in line, the car chip shortage may abate sooner.
Here's hoping.

Ron.s

Mikapen, I think that only solves apart the problem. I think there is also a shortage of the cheap older chips that are needed for some of the simpler functions in a car. Crap…they can’t even give us a 720 camera right now. I know little about chips but have read that some older foundries are humming along because of the demand for their chips…like GlobalFoundries that Intel is rumored to be purchasing for $30 Billion. They are still making chips on 200/300 millimeter.

Here’s part of a Barron’s article that just hit my news feed:“Asia is winning the war for semiconductor production. The idea of a “war” is dramatic, but the urgency of the moment cannot be overstated.

The microelectronics industry underpins nearly every segment of the U.S. economy: healthcare, automotive, communications, industrial manufacturing, consumer electronics, and many others. The current chip shortage has put a spotlight on supply-chain vulnerabilities in the U.S. and forced many companies to reconsider their business strategies. Inability to meet demand for chips is playing a role in surging inflation. The White House has warned that national security is at risk if we cannot reinvigorate domestic manufacturing.

Although the U.S. is still the leader in technology innovation, domestic production of semiconductors has been declining for decades. Today, only 12% of semiconductors are manufactured here. Taiwan Semiconductor Manufacturing Company alone makes up 56% of market share in certain global markets for advanced technologies, according to Statista. TSMC has proposed to invest in new factories in the U.S., and that’s encouraging news. But consider this: On July 1, Chinese President Xi Jinping pledged reunification with Taiwan, a scenario that could put China in the driver’s seat for global semiconductor manufacturing. Even if the odds are low, the upshot is clear: We need to make critical American supply chains safe from geopolitics.

It is time for a market recalibration. We need to immediately begin reshoring American chip manufacturing before the war for semiconductor production is lost. I believe that the best way to do this is through public-private partnerships. For years, other countries’ governments have invested heavily in their high-tech sectors in a way that the U.S. has not. We are not on equal footing. Business alone cannot compete against the market distortions in other countries.”

The Dems are meeting with Tech to see how much money they need to throw at the problem. You can always count on the Government to fix any problem…..might make US chip stocks bounce higher if nothing else.

mikapen

Yep, it could become a crisis.
Regarding autos, I'm not surprised that Ford will begin shipping vehicles without some chips, for the dealer to install later. https://www.caranddriver.com/news/a3...pply-shortage/
I wonder if some of these will be delivered to customers with credit for disabled functions, like Tesla did, only to charge later.
Anyway its a big deal, and will require ongoing creative solutions.

conditionone

The term "shipping vehicles without some chips" sounds ridiculous to me. It might be more accurate to say that they will be shipping vehicles without some control units, modules or electronic parts due to the chip shortage. Auto mechanics/techs do not replace chips, they replace modules and control units that contain chips. I doubt dealer techs will be soldering chips on boards. Or will they?

mikapen

Did you read the article? Maybe Car and Driver / Automotive News used a figure of speech that the editors thought would be understandable.

Ron.s

We all take shortcuts…I mentioned wafer size at GlobalF when the more relevant fact is the chip itself. Smaller wafers usually = less advanced/more expensive chips.
I think everyone knew what they meant particularly when we see the components being eliminated by Mercedes. If I was a Tech guy it would probably irritate me too. Actually most Dealers might do a better & quicker job than the factory on some components. Mercedes apparently hasn’t learned their lesson from 2019 since they are still building GLE’s today and adding parts off of the Assembly Line. Maybe this time will be different…or not.

conditionone

Yes I read the article and I am an automotive tech, so yes irritating.