Sections

ideals
Business Essentials for Professionals



Auto Chip Making Will Be Prioritized By TSMC If Possible, Says Taiwan Ministry: Reuters


01/25/2021


Auto Chip Making Will Be Prioritized By TSMC If Possible, Says Taiwan Ministry: Reuters
The global auto industry is struggling with a shortage of chips for cars. Various countries have appealed to the Taiwanese authorities to increase production of semiconductor chips used in cars over the weekend.
 
In its response the Economics Ministry of Taiwan said that production of auto chips would be prioritized by the Taiwan Semiconductor Manufacturing Co Ltd (TSMC) if the company is able to enhance its capacity for manufacturing, said a report by the news agency Reuters.
 
The issue was discussed between Taiwan’s Economics minister Wang Mei-hua and senior executives of the TSMC on Sunday, a ministry official said.
 
The ministry said that the company has informed that its production process of chips will be optimised by it to make it more efficient and will prioritize auto chip production if the company manages to sufficiently increase its production capacity, TSMC had told the ministry.
 
Currently the production capacity of the company is full, said the largest contract chip maker of the world. The company has however reportedly pledged to the minister that “if production can be increased by optimising production capacity, it will cooperate with the government to regard automotive chips as a primary application”.
 
“Other than continuously maximising utilisation of our existing capacity, Dr. Wei also confirmed in our investors’ conference that we are working with customers closely and moving some of their mature nodes to more advanced nodes, where we have better capacity to support them,” the company said in a statement referring the comments made by its Chief Executive Officer C.C. Wei on an earnings call earlier this month
 
A request has been made to Taiwan by Germany to convince the country’s chip makers to increase production of auto chips to resolve the shortage in the global market as production in the global auto industry is being hampered. Auto manufacturing is one of the largest industries of Germany and it is critical for the German economy that this industry performs well in its efforts to revive the economy from the Covid-19 hit. 
 
German Economy Minister Peter Altmaier had made the request to Wang in a letter.
 
Prior to contacting TSMC again, the ministry would wait until it had received the letter, it said. A shortage in auto chips is forcing auto companies around the world to shut down their assembly lines. According to analysts, part of the reason behind this shortage are the actions against Chinese chip factories as initiated by the former United States president Donald Trump.
 
The auto companies affected by this chip shortage include Volkswagen, Ford Motor Co, Subaru Corp, Toyota Motor Corp, Nissan Motor Co Ltd and Fiat Chrysler Automobiles.
 
Similar requests had been received by Taiwan through its diplomatic channels about the shortage late last year from the United States and the European Union while Germany and Japan have sent in their requests this year, the Taiwanese ministry reportedly told Reuters. \
 
“The Americans did express the expectation late last year,” the ministry said. “At the moment everyone is talking to each other through diplomatic channels, including TSMC. Everyone’s hands are tied with orders, but from the government’s perspective we will try to help as much as we can for our important allies.”
 
(Source:www.reuters.com)