The boom in artificial intelligence (AI) has left chip suppliers scrambling to keep up even as the CEO of the world’s largest contract chipmaker has said that it will take years to meet consumer demand and that the company will do everything possible to keep the global tech industry moving. TSMC CEO C.C. Wei recently told reporters that AI demand remains incredibly strong, while taking a jab at computer memory (RAM) manufacturers for their aggressive pricing strategies during this high-demand cycle.“Customer demand is so high, and we can only support so much. We are already working very hard. We are doing our best to ensure TSMC does not become a bottleneck,” Wei said at the company’s annual shareholder meeting in Hsinchu, acknowledging that suppliers throughout the upstream tech pipeline are struggling.
TSMC will not raise prices
When asked if TSMC would consider raising its own prices to capitalise on the market like the RAM makers have done, Wei admitted he was interested in higher chip prices but stressed that TSMC would avoid the sudden, steep price hikes seen elsewhere in the industry.“I envy their 80% gross margins, but I would never do that,” Wei told reporters, referencing the massive profits being pulled in by some memory firms. Instead, TSMC is carefully monitoring how rising component costs affect the broader market.When talking about US production challenges, Wei warned that American production won’t solve supply issues overnight. Wei stated, “It will take a ‘very long time’ to fully satisfy American customers’ needs with production in the US.” TSMC is currently investing a massive $165 billion to build new microchip factories in Arizona.Wei also provided insight into TSMC’s research and development strategy, specifically regarding ASML’s next-generation “High-NA EUV” machines. These advanced tools use light to print incredibly intricate circuit patterns onto silicon wafers, and cost up to $400 million each.While TSMC has purchased the tools for research purposes, Wei said they are simply too expensive to use for mass production right now. “We will continue working to lower the cost and maximize its benefits, and once the economics make sense, we will bring it into production,” he explained.For Wei, autonomous vehicles and robotics will serve as TSMC’s next long-term growth drivers.
