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TSMC's Equipment Delivery Delays and Packaging Shortages

Published: 9.14.2023

TSMC has told equipment vendors to delay deliveries of the most advanced tools due to uncertain demand, according to Reuters. The news drove down stock prices of all the major equipment providers, including ASML, Applied Materials, and Lam Research.

TSMC is also facing shortages in advanced packaging, which will constrain AI chip shipments for the next 18 months, according to NikkeiAsia. Advanced packaging is a critical step in chip manufacturing, and shortages of these materials could have a significant impact on the AI industry.

The chipmaker has been struggling to keep up with demand for its products, and the current economic uncertainty is only making the situation worse.

These delays are likely to have a knock-on effect on other chipmakers, as many of them rely on TSMC to manufacture their chips. This could lead to further shortages of chips and higher prices for consumers.

The AI industry is also facing concerns related to shortages in advanced packaging materials. These scarcities have the potential to cause setbacks in the progress and rollout of new AI products and services.

It is unclear when the delays in equipment deliveries and the shortages in advanced packaging will be resolved. TSMC has said that it is working to address the issues, but it is likely to take several months or even years to fully resolve them.

In the meantime, consumers and businesses should be prepared for higher prices and longer wait times for electronic products and components.

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