As the AI ​​market rises, TSMC President Dr. Mark Liu warns that AI-based graphics card, processor and accelerator chip production could be in short supply in the long run. For the CEO, if we continue at the same pace that we are following now, there will be a new shortage of components to work in this industry after a while. He is most concerned about strong demand this quarter, which could affect his business.

Profit from this niche is only 6% of the corporation’s revenue, but Liu says that by 2028 this figure could grow by 50% per year. According to the president, the production capacity of the chips is currently mixed – while they can ship components to their commercial partners without much headaches, their own factory is closely related to the materials used. He believes that the situation will return to normal only at the end of 2024.

For Dr. Mark Liu, TSMC is on high alert. “Of course, basically we have a model. The short-term demand for artificial intelligence cannot exactly be extrapolated into the long term. And we also cannot predict what will happen in the near future, more precisely next year, how this sudden demand can be maintained or even reduced. However, our model is based on the structure of the data center.

The President tells them they need to analyze the numbers to get something more concrete. “This model will be stabilized with practical data later. However, in general, I believe that this trend of most data center processors towards artificial intelligence processors is undeniable. Won’t this lead to the cannibalization of data center processors? In the short term, when cloud service capital spending normalizes, yes. generative AI services.

TSMC plant for 2025

Regarding the delay in the construction of the TSMC plant in the US, Dr. Mark Liu also spoke out, who argues that the biggest problem is actually costs. “Anyway, we tried to work with the US administration. First of all, it is a question of subsidies, both in cash and in commissions – investment in credit, which would cover our expenses for the first five years or so. When a tool depreciates, the ecosystem becomes visible.”

For Liu, this includes a number of expenses that go beyond the original planning. “That means material, chemical and laboratory costs. And we are working with our suppliers to improve the efficiency of the supply chain, to make it cheaper, but they and the US administration have decided to subsidize our suppliers as well. So this is still a work in progress. How much we can cut, I don’t know. But I believe that in any case, it will strengthen our values ​​and allow the profits of the corporation to reach the expected.”

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Source: Wccftech

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