Skip to Content
Stock Strategist Industry Reports

What the 28-Nanometer Shortage Means for the Chip Industry

Near-term winners include ATMI and KLA-Tencor.

Mentioned: , , , , , , , , ,

Several leading chipmakers, including Qualcomm (QCOM) and Nvidia (NVDA), have announced that they will have trouble fully satisfying demand in the coming months because of capacity constraints for cutting-edge 28-nanometer chip wafers. Taiwan Semiconductor (TSM), or TSMC, the world's largest foundry and technological leader in 28 nm chip production, simply doesn't have enough production capacity on hand to fulfill all its orders. The shortage is likely to cause a scramble in the chip supply chain--foundries will race to expand capacity and buy new equipment, while chipmakers will look at alternatives, such as using 40 nm chips or switching to competing foundries, in order to fulfill demand.

How We Got Here
Initially, rumors swirled that TSMC's production yields for 28 nm chips were subpar and that technological roadblocks were the source of many customers' frustrations. But more-recent comments indicate that 28 nm yields are acceptable, but TSMC simply doesn't have enough production capacity to fully meet demand.

Brian Colello does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.