What They Say
It’s not news that chip supply chains are constrained, but TSMC said that even though it’s revenues are expected to be up 37% year on year in Q2, it is struggling to try to keep up with demand. The firm said that it is working with production tool makers to boost capacity. In particular, it is trying to make sure that the equipment itself is not held up by delays in getting chips. The challenges from tool supply are impacting both new and legacy chip production. Despite the challenges, TSMC still plans to spend $40 to $44 billion this year.
The desire to boost capacity is tempered by concerns about demand growth in the light of macroeconomic and political pressures from Covid and the Russian war on Ukraine.
Separately, Nikkei pointed out that half of Apple’s top 200 suppliers in China are in areas that have been impacted by Covid lockdowns.
What We Think
I heard of a production manager at a supplier recently that was bemoaning that despite having big inventories, bigger than seen for years, he said “I still only have 98% of what I need”. BR)
