Good news for automakers: TSMC CEO C.C. Wei expects automotive semiconductor supply to normalize later this summer.

“TSMC has actively taken steps throughout the first half of this year, and we will continue to do so in the second half to address the chip supply challenges for our automotive customers,” he said during the company’s second-quarter 2021 earnings call, according to a Seeking Alpha transcript.

High demand and limited semiconductor manufacturing capacity has hobbled automakers driving several, including General Motors, Ford, and Nissan, to cut production.

As it stands, it takes more than six months for microcontrollers (MCUs) to reach automotive original equipment manufacturers, Wei explained. TSMC aims to cut lead times dramatically over the next quarter by working with customers to reallocate wafer capacity to support the automotive industry.

“For the full year, we expect to increase output for MCUs by close to 60% over the 2020 level which also represents about a 30% increase over the 2018 pre-pandemic level,” he said. “By taking such actions, we expect the automotive component shortage from semiconductors to be greatly reduced for TSMC customers starting this quarter.”

Long term, Wei expects the demand for silicon in the automotive sector to grow rapidly over the next few years.

“Semiconductor content in automotive, as the trend towards safer, greener, and smarter vehicles ... will continue to drive silicon content increase as well as the demand for advanced and specialty technology,” he said.

TSMC’s revenues surged to $13.29 billion during Q2, up 28% year over year and 2.7% quarter over quarter.

During the second quarter, TSMC realized a net income of $4.81 billion, up approximately 11.2% year over year when adjusted from New Taiwan dollars.

TSMC’s most advanced 5-nanometer manufacturing process accounted for roughly 18% of total wafer revenues during the quarter, while the company’s more mature 7-nanometer process, widely used by chipmakers like AMD, accounted for 31% of sales, the company said.

“Moving into third-quarter 2021, we expect our business to be supported by strong demand for our industry-leading 5-nanometer and 7-nanometer technologies driven by all four growth platforms, which are smartphone, HPC, IoT, and automotive-related applications,” TSMC CFO Wendell Huang said.

The company forecasts Q3 revenues of $14.6 billion to $14.9 billion.

In the wake of the global semiconductor shortage, foundry operators including TSMC, Intel, Samsung Electronics, and GlobalFoundries have bolstered production and announced new facilities.

TSMC alone plans to spend $100 billion over the next three years to expand its semiconductor fabrication capacity.

“We are entering a period of higher growth as the multi-year megatrends of 5G and [high-performance computing] are expected to fuel strong demand for our semiconductor technologies in the next several years. In addition, the COVID-19 pandemic also accelerates digitalization in every aspect,” the company said in a statement from April.

In early 2020, the company announced plans to build a $12 billion foundry in Arizona, which would produce roughly 20,000 wafers per month when it opens in 2024.

Meanwhile, Intel, one of the few major chipmakers still manufacturing its own chips, opened its foundry operations for contract manufacturing this spring, following former VMware CEO Pat Gelsinger’s return to the company as CEO. As part of the Intel Foundry Services launch, the chipmaker announced a $20 billion plan to construct two chip fabs in Arizona.

A few months later, the Intel announced a $3.5 billion modernization project to upgrade its Rio Rancho, New Mexico facility. Intel is also in talks with European leaders regarding funding for a third foundry project in the region.