TSMC Claims Some Companies are Sitting on Chip Inventories

It appears that some of the current chip shortages might be artificially induced by one or multiple companies in the chip supply chain, according to an article by TIME. The article is taking a look at the role TSMC is playing in the global chip production industry and TIME has interviewed TSMC chairman Mark Liu among others in the industry.

Mark Liu is quoted as saying “But I told them, “You are my customer’s customer’s customer. How could I [prioritize others] and not give you chips?”” when asked about the complaints by car makers, since they were among the first to suggest TSMC was one of the issues. Due to the various allegations against TSMC, Liu had a team collect data points to try and figure out what was going on and to see which customers were truly running low on stock and which customers that might be stockpiling for a rainy day.

The end result of this was that TSMC decided to reallocate some production to customers it deemed to be running out of stock, whereas those that appeared to be sitting on their inventory, per qualsiasi ragione. This was apparently not a popular decision, but it seems like a fair one, considering the current situation. Liu is again quoted saying “there are people definitely accumulating chips who-knows-where in the supply chain,” suggesting that it might not actually be TSMC’s customers that are the issue here, but rather middlemen and distributors that are hoarding chips and pushing up prices.

The article is worth a read if you’re interested in a slightly closer look at TSMC, although it doesn’t go into any more detail about the chip hoarding. D'altra parte, it does look at the geopolitical issues that TSMC and Taiwan faces, while Liu also frowns upon the current US$50 billion budget that President Biden has allocated for new foundries in the US, considering that TSMC is investing twice as much on its own over the next three years.