Global chipmaking inventories hit record high of $64.7 billion

Total inventory for the world’s nine leading chipmakers reached a new record value of US$64.7 billion ($NT1.77 trillion) at the end of June.

The news comes as companies quickly move to scale up production to alleviate an extended chip shortage that has strained supply chains across various industries this year, according to a Nikkei report released on Saturday (Aug. 21).

Digitization and the rise of wireless technology have made chips an indispensable component across industries. Chipmakers, whose production has also been hit by the COVID-19 pandemic, have struggled to keep up.

Taiwan Semiconductor Manufacturing Corporation (TSMC), the world’s largest chipmaker, optimized production lines in the first half of the year, expanding production of automotive chips by 30% from a year earlier.

The world’s nine largest manufacturers, namely TSMC, Intel, Samsung Electronics, Micron Technology, SK Hynix, Western Digital, Texas Instruments, Infineon Technologies, and STMicroelectronics, are all expanding their stockpile of raw materials to drive new production capacities.

The share of raw materials in total inventory has steadily been increasing since March 2019 at seven of the companies that provide comparable data, and it reached 24% at the end of March, per the report.

Meanwhile, leading chipmakers continue to rake in record revenues. The top 10 players by market capitalization made US$276 million in net profit in the second quarter this year (April-June), a year-on-year increase of about 60%. Taiwan News