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Monday, June 17, 2024

TSMC to prioritise production of chips for cars, not your next graphics card

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Reports of chip shortages impacting all manner of industries abound, it’s not just graphics cards that are hard to come by. Now comes news that megafoundry TSMC is prioritising production of chips for cars over other applications. What hope is there for us poor gamers ever getting our hands on a new GPU?

TSMC, of course, is the Taiwanese foundry that currently makes most of AMD’s CPUs and GPUs, not to mention Apple’s smartphone chips and the new Apple M1 processor. According to CNBC, TSMC plans to prioritise new production capacity in favour of car makers.

The move comes as pressure reportedly mounts at government level for TSMC to prioritise chips intended for cars. The global auto industry is currently suffering from significant production delays due to the shortage of chips, leading Germany’s Economy Minister Peter Altmaier writing to his Taiwanese counterpart requesting that TSMC, a key supplier of semiconductors for cars, focus on production for cars above all. Similar requests have reportedly been sent from the US, the European Union and Japan.

The economic imperatives of maintaining production for car applications is clear enough. A missing GPU means a $500 graphics card might not get made. But without semiconductor supply, a car with a retail value of fully two orders of magnitude greater can’t be produced. No wonder the big car producing nations are trying to twist an arm or two.

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Meanwhile, chips for cars are becoming an increasingly key component as cars become ever more intelligent and connected. Tesla even hired superstar chip designer Jim Keller back in 2016 to help design its own chips for applications including self driving.

And just yesterday came reports that Tesla is partnering with Samsung to produce its next self-driving chip on 5nm. Tesla’s in-house designs replaced chips previously bought in from Nvidia, as it happens, which just goes to show how intertwined all this stuff is.

But before panic sets in and we all assume there will be no more GPUs for the foreseeable future, a few factors are worth bearing in mind. Firstly, it’s critical to note that the prioritisation is said to apply to any increase in capacity. TSMC will not be reducing the production of other chips in favour of semiconductors for cars.

“If production can be increased by optimizing production capacity, [TSMC] will cooperate with the government to regard automotive chips as a primary application,” a TSMC spokesman has explained.

What’s more, the proportion of TSMC’s capacity dedicated to car chips is actually thought to be low – as in small single-digit percentage low. Arguably even more important, Tesla’s self-driving chips aside semiconductors for cars tend to be on more mature processes a node or three behind the cutting edge.

In other words, it’s likely the car chips in question are produced on a different process from AMD’s CPUs and GPUs, in which case there is no conflict in terms of access to capacity. Which isn’t to say we think the graphics card shortage is going to resolve any time soon. But it probably isn’t going to be made worse by car makers getting in a strop.

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