TSMC to Face Inventory Glut Caused by US-China Trade War

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eetimes.com, Jun. 10, 2020 – 

Taiwan Semiconductor Manufacturing Co. (TSMC) and analysts who cover the company recognize an inventory glut in the electronics supply chain.

That's where they part ways.

TSMC is maintaining its outlook for this year, Chairman Mark Liu said at a press event Tuesday. The world's biggest foundry has budgeted $15 billion to $16 billion for capital spending this year, an increase from last year's $14.9 billion.

"iPhone sales are still pretty good," Liu said of Apple, TSMC's top customer.

Moreover, Liu is optimistic that the U.S. government will relax its restrictions on chipmakers that use U.S. equipment and design tools to supply semiconductors to Huawei subsidiary HiSilicon.

He said that by mid-July, TSMC will apply to the U.S. Department of Commerce for a license to sell chips to HiSilicon.

Stockpiling by Huawei

Yet analysts worry that excess inventory in the supply chain and the potential loss of sales to HiSilicon, TSMC's second-largest customer, will impact the foundry and other electronics companies later this year.

"I don't see any winners from this scenario," says Brett Simpson, senior analyst with UK-based Arete Research. "It's going to be a very challenging 12 months or so for the world's supply chain. A lot of businesses that buy semiconductors are worried about business continuity."

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