In context: The US government has asked chipmakers to be more transparent about what they are doing in order to expose bottlenecks in the supply chain. Regulators are clinging to straws, however, as foundries are operating at full capacity and the only way to address the current chip shortage is to build more manufacturing plants – something that is already happening but will take years to come. fully materialize.
Last month, US Secretary of Commerce Gina Raimondo told Reuters that it was time for the government to become more aggressive in dealing with the current chip shortage which is having a big impact on many. many industries and directly affects thousands of American workers.
Raimondo explained at the time that the White House sent out a voluntary request for information to chipmakers in an attempt to determine supply chain bottlenecks and identify potential solutions to challenges ahead. . She also warned that if businesses fail to meet demand, regulators are prepared to use other tools to constrain them.
The problem is, foundries like TSMC don’t yet know how to meet this demand, or even whether or not they can. The company has been asked to disclose various details about the types of products it manufactures for its customers, stock levels, lead times, as well as its supplier and customer relationships, expansion plans, and how. it allocates the available production capacity.
Sylvia Fang, who is TSMC’s general counsel, told Nikkei “we will certainly not disclose sensitive company information, especially information related to our customers.” Fang said the company is currently evaluating the request to see how it could respond to it without compromising information it considers confidential.
TSMC is already doing its best to help companies with low levels of chip inventory, and it has even prioritized chips for automakers to some extent. Earlier this week, TSMC Chairman Mark Liu said the situation is much more complex than it appears and that some companies have been accumulating chips for months.
As for increasing transparency, Fang says that “customer trust is one of the key elements of our business success,” so the company will take its time before responding to the US government questionnaire. It also has the full support of the Taiwanese government, which is ready to step in “if our companies are faced with unreasonable demands.”
Companies that have received the questionnaire have until November 8 to respond voluntarily. Even if they do, it’s unclear how the U.S. government intends to address an issue that is the result of a factor storm, including stratospheric demand for chips, an energy crisis in China, and lockdowns. Covid in Malaysia which has led to plant closures, as well as rising prices for raw materials like silicon and rare earth metals. And let’s not forget the fact that chipmakers can’t find enough skilled workers just yet.
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