Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) shares fell 1.68 percent yesterday after the chipmaker warned about the risk of overcapacity with regards to less advanced semiconductor technology.
The world’s biggest contract chipmaker on Tuesday said that the COVID-19 pandemic and US-China trade tensions have led to “double booking” by clients amid mounting uncertainty over chip sourcing, which is part of the reason for the chip supply crunch.
The pandemic has disrupted supply chains and driven inventory stockpiling, and the supply of chips and other raw materials is unpredictable, TSMC chairman Mark Liu (劉德音) told reporters on the sidelines of the annual Taiwan Semiconductor Industry Association convention in Hsinchu.
Photo: Ritchie B. Tongo, EPA-EFE
Liu used the severe shortage of 28-nanometer chips, mostly used in vehicles, as an example.
In reality, global 28-nanometer capacity surpasses market demand, he said.
The tight supply of 28-nanometer chips is actually a problem of allocation, which cannot be resolved by expanding capacity, he said.
TSMC would do its best to distinguish inventory from real demand, or urgent demand, before allocating its chip supply, he said.
Last year, 13 percent of TSMC’s revenue came from 28-nanometer chips, down from 16 percent a year earlier.
United Microelectronics Corp (UMC, 聯電) is more bullish about 28-nanometer chips.
Due to healthy customer demand, the company has said that it cannot find any spare capacity for almost all types of chips, including 28-nanometer chips.
UMC has said that it expects 28-nanometer chips to account for 25 percent of its revenue this year, compared with 14 percent last year.
Separately, TSMC said that its production was not affected by a substation malfunction at one of its 12-inch fabs in Hsinchu yesterday.
One subcontracted worker was hospitalized due to the incident as he had inhaled too much carbon dioxide, the company said.
TSMC shares closed at NT$587 in Taipei trading yesterday.
Over the past month, the stock has tumbled 3.14 percent, underperforming a 2.99 percent rise on the TAIEX over the same period.
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