Taiwan is spending $100 billion to solve global chip shortage

Taiwan Semiconductor Manufacturing Co. (TSMC), one of the world’s largest chipmakers, has unveiled plans to invest $100 billion to increase the output of semiconductor chips to keep up with rising global demand.

This announcement comes after US semiconductor leader Intel’s decision last week to spend $20 billion to boost semiconductor production both domestically and in Europe.

TSMC CEO, Wei Che-Chia, said that the company will start building new fabrication plants and expanding existing ones for both leading-edge and specialty technologies.

“We have started hiring thousands of new employees, acquired land and equipment, and started construction of new facilities at multiple sites globally,” he added.

Semiconductor chips are integral to the global cloud and data centre industry. As demand for cloud services continues to grow exponentially and more data centres are being built all around the world, semiconductor chips are seeing such a sharp rise in demand that the global market is heading towards a shortage.

Said shortage also appears to be spreading to the electronic hardware industry, including smartphones, tablets, and laptops.

In January, TSMC had set aside a budget of $25 billion to $28 billion for chipmaking. The company’s quadruple increase in investment shows the urgency of chip shortage in the semiconductor industry.

On top of technological expansion, CEO Wei also promised clients that TSMC would suspend wafer price discounts throughout the whole of 2022.

Taiwan is currently the world’s leading semiconductor manufacturer, alongside South Korea’s SK Hynix. In March, Japan had to source semiconductor chips from Taiwan after a fire devastated a production plant in northeast Japan.