Meanwhile TSMC has just announced $100 billion capital expenditure over three years to expand its own manufacturing capacity (see TSMC plans to spend $100 billion over three years ) and is actively engaged in building a wafer fab campus in Arizona (see Reports: TSMC planning for six wafer fabs in Arizona ).
Liu was speaking at a Taiwan Semiconductor Industry Association (TSIA) meeting in Hsinchu, Taiwan, in his role as chairman of the TSIA. Liu said that if entire semiconductor supply chains were replicated in the US and in Europe it would lead to a large amount of "non-profitable capacity."
Liu was also reported saying that some part of the current chip supply shortage is the result of double-booking of orders prompted by uncertainty in 2020. That uncertainty in turn came from the Covid-19 pandemic and rushed orders as smartphone makers tried to fill a gap left by the blacklisted Huawei Technologies.
"Uncertainties led to double booking, but actual capacity is larger than demand," Liu is reported saying. How quickly the supply chain dysfunction persists depends on progress in US-China negotiations, he added.
Liu said TSMC has the manufacturing capacity to meet the high demand for artificial intelligence and 5G applications. He also said TSMC is able to spot double-ordering and can differentiate between orders that are urgent and required to keep factories operating, and those that are for being stock-piled for inventory.
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