According to industry sources, TSMC recently issued a notice to some of its customers that it will cancel the 2022 price discount based on the current production capacity shortage and the consideration of investing in new factory capacity.

The notice pointed out that, driven by 5G and HPC (high-speed computing), market demand has undergone structural changes. Due to the shortage of semiconductor production capacity, TSMC must implement strategies and actions for this major challenge.

The notice also mentioned that TSMC is deeply aware of the difficulties and challenges faced by customers and has tried its best to increase production capacity in the past year. The utilization rate has reached more than 100%, but it still cannot meet current demand. In the next three years, the company will invest 100 billion U.S. dollars to increase production capacity to support the manufacturing and R&D of advanced processes. In addition, it will establish a new fab in the near future.

At the same time, TSMC said that it has begun to recruit thousands of new employees, and to purchase additional land and equipment to accelerate the construction of new fabs and production capacity.

TSMC stated that in order to achieve TSMC’s goal of becoming a global advanced technology and capacity provider, it is currently facing many challenges such as increasing technical difficulties and increasing costs. Therefore, it will suspend sales discounts for the four quarters from December 31, 2021. TMSC believes that this action will be the least disruptive to the supply chain, so that it can continue to provide leading semiconductor technology and manufacturing capabilities to customers.