Chip manufacturer TSMC plans to open Singapore plant to tackle chip shortage

The Taiwan Semiconductor Manufacturing Company (TSMC) is said to be discussing with the Singaporean government a plan to open a factory in this country.

TSMC is well known for making Apple’s A-series and M-series chips, as well as AMD processors, but the tech giant also produces chips for display drivers and power management, which are scarce due to supply constraints due to COVID-19 related lockdowns. These supply constraints have already cost Apple $6 billion over the past two quarters, and that amount could reach $8 billion.

According to the Wall Street Journal report, the Singapore factory would theoretically help address this shortage by manufacturing more of these critical chips. TSMC is studying the feasibility of production lines that make chips from seven to 28 nanometers, according to reported sources. This would be based on older production technology already used by cars, smartphones and other devices.

The new plant is still under negotiation and has not yet been finalized.

Analysis: why the move?

TSMC has other reasons for wanting a new factory in another country. The first is that it would be easier to work around China, which has a complicated relationship with China, to say the least, and avoid having too much chip production in one country.

The company is also interested in building six factories in the United States, but has encountered several difficulties in the year since the plans were announced. Opening a factory in Singapore would further contribute to global diversification, while potentially avoiding what TSMC founder Morris Chang said was a shortage of manufacturing talent in the United States as well as the high cost of manufacturing. chip production.

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Quanta Computer, the only supplier of high-end MacBook Pro models, has also considered moving production from Shanghai to the Chongqing factory to help ease supply constraints as well. TSMC is therefore not the only Apple supplier to seek to diversify its production. in response to the supply chain crisis.

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