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Taiwan Semiconductor Manufacturing Co., the world’s largest contract chip maker, said it expects the chip shortage that has plagued automakers to start easing in the coming months after increasing. its production of automotive chips.
The company is on track to increase production of microcontrollers used in cars by about 60% this year from last year, chief executive CC Wei said on a earnings conference call on Thursday. However, he said, the wider semiconductor shortage could persist until 2022.
A shortage of semiconductors, used in products such as home appliances and smartphones, has hampered manufacturing activity, especially in the automotive industry. This shortfall is expected to be significantly reduced for TSMC customers in the current quarter, Wei said.
Global automakers in the United States and Europe have pressured TSMC to prioritize their orders, forcing the chipmaker to negotiate with other customers to free up auto chip manufacturing capacity.
Second-quarter auto chip revenues increased 12%, but only accounted for 4% of overall sales. Meanwhile, smartphone chip revenue fell 3%, accounting for 42% of overall sales. Mr. Wei said he expects the demand for chips in the automotive industry to increase as more cars go electric and automated.
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