TSMC says chip shortage is a myth, companies have built up inventories

According to an article in TIME magazine, in the current chip shortage situation, part of the shortage may have been artificially created by one or more companies in the chip supply chain. The article looks at TSMC’s role in the global chip manufacturing industry.

TIME interviewed TSMC President Mark Liu, who works in the industry, among others.
When asked about the automakers’ complaints, they were among the first to suggest TSMC was one of the problems. Because of the various allegations against TSMC, Liu had a team collect data to find out what was going on and which customers were truly out of stock and which customers might be hoarding inventory.

There are definitely people stockpiling chips in the supply chain. The result was that TSMC decided to reallocate some production to customers it felt were running low on product, while those who had inventory reduced their allocation of new wafers. Obviously, this was not a popular decision, but given the current situation, it seems fair.

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Liu said, “There are definitely people hoarding chips in the supply chain,” suggesting that it is not TSMC customers who are the problem, but the middlemen and distributors who are hoarding chips and driving up prices.