Chip manufacturer TSMC plans to open a factory in Singapore to address chip shortage

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The Taiwan Semiconductor Manufacturing Company (TSMC) is reportedly in talks with the Singapore government to open a factory in that country.

TSMC is known for manufacturing 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 in short supply due to supply constraints due to COVID-19-related lockdowns. These supply constraints have already cost Apple $6 billion in the past two quarters, and that amount could rise to $8 billion.

According to the Wall Street Journal report, the Singapore plant would theoretically help address this shortage by producing more of these critical chips. TSMC is studying how feasible production lines for chips from seven to 28 nanometers would be, according to reported sources. This would be based on older manufacturing technology already in use by cars, smartphones and other devices.

The new factory is still under negotiation and has not yet been completed.

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 producing too many chips in one country.

The company is also interested in building six plants in the US, but has encountered several problems in the year since the plans were first announced. Opening a factory in Singapore would further aid in global diversification, while potentially avoiding what TSMC founder Morris Chang said as a lack of manufacturing talent in the US and the high cost of chip manufacturing.

Quanta Computer, the sole supplier of high-end MacBook Pro models, has also looked at moving production from Shanghai to its Chongqing plant to also ease supply constraints, so TSMC isn’t the only Apple supplier looking to diversify its production. in response to the supply chain crisis.

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