TSMC Sees Excessive Inventory for Latest Chips

15 JULY 2022 - News that sounds weird at first: A report from Gizmodo has Apple processor partner TSMC complaining of “excessive chip inventory.” I’m sorry. It’s not fair to say “complaining.” Also, what?!? Too many chips? When for months it’s been too few?

Relax. It still is. What the world’s been short on is legacy chips - the kinds used in cars and data centers. Supply for those is still “tight,” according to Gizmodo. As for the more modern processors, the report has TSMC indicating that:

…softening demand in PCs, smartphones, and other consumer segments has led to an “excess inventory in the semiconductor supply chain.” The chipmaker predicts it will take “a few quarters” before things rebalance.

What’s the problem? You name it. Anybody building out their home office has probably gotten that done over the past couple of years. There’s “geopolitical tension.” There’s “soaring inflation.” And there’s the meltdown in crypto. “Another culprit of the chip supply shortage,” says Gizmodo, “crypto mining, has imploded in recent months as crypto values continue their bottomless freefall.”

It looks like rough sledding near-term for the chipmaker, though things should smooth out. TSMC CEO C.C. Wei is quoted in the report, saying:

While macroeconomic headwinds bring near-term uncertainties that may persist, we believe the fundamental structural growth trajectory in the long-term semiconductor demand remains firmly in place…

Less “the sun will come out tomorrow,” more “it can’t rain all the time.”