TAIPEI (Reuters) – Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) will prioritize car chip production if it can further increase its capacity, Taiwan’s Economy Ministry told Reuters amid a global shortage that has hindered car production.
A ministry official said Minister Wang Mei-hua spoke with senior company executives on Sunday about the issue.
TSMC had told the ministry that it will “optimize” the chip production process to make it more efficient and will prioritize automatic chip production if it can further increase capacity, the ministry said.
TSMC, the world’s largest contract chip maker, said the current production capacity is full, but assured the ministry that “if production can be increased by optimizing production capacity, it will cooperate with the government to consider the chips. of automotive as a main application “.
TSMC, in a statement to Reuters, referred to CEO CC Wei’s comments on a earnings call this month.
“Apart from continuously maximizing the utilization of our existing capacity, Dr. Wei also confirmed at our investor conference that we work closely with clients and move some of their mature nodes to more advanced nodes, where we have better capacity. to support them “. said the company.
Germany has called on Taiwan to persuade Taiwanese manufacturers to help alleviate the shortage of semiconductor chips in the automotive sector, which is hampering its fledgling economic recovery from the COVID-19 pandemic.
The request was made in a letter from German Economy Minister Peter Altmaier to Wang.
The ministry said it would wait to receive the letter before deciding whether to contact TSMC again. Automakers around the world are shutting down assembly lines due to problems with semiconductor delivery, which in some cases have been exacerbated by former Trump administration actions against major Chinese chipmakers.
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The shortage has affected Volkswagen, Ford Motor Co., Subaru Corp., Toyota Motor Corp., Nissan Motor Co. Ltd., Fiat Chrysler Automobiles and other automobile manufacturers.
The ministry told Reuters it had received requests from both the United States and the European Union through “diplomatic channels” late last year, as well as from Germany and Japan this year.
He said that in the second quarter of last year car companies reduced orders to TSMC, which in turn shifted capacity to other customers, but in the second half of the year demand for auto chips returned.
“Americans expressed expectation late last year,” the ministry said.
“Right now 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 our important allies as much as possible. “
A senior official from Japan’s Ministry of Economy, Trade and Industry told Reuters that the association of Japanese carmakers and TSMC were already in contact, and the ministry has also addressed the de facto embassy. from Japan to Taipei to ask for their support in these talks.
The official added that this is mainly a private sector exchange, so the government can limit itself to what it can do.
In 2020, auto chips accounted for only 3% of TSMC’s sales, with a 48% delay and 33% of high-performance chips.
In the fourth quarter, TSMC’s auto chip sales increased 27% from the previous quarter, but accounted for only 3% of overall quarterly sales.
A senior Taiwanese government official familiar with the matter told Reuters they could not do much.
“They dropped their orders for various reasons when demand was low in the midst of the pandemic. But now they want to increase their production.”
Report by Jeanny Kao and Yimou Lee; Additional reports from Kaori Kaneko in Tokyo; Written by Ben Blanchard; Edited by Christian Schmollinger, Shri Navaratnam and Raju Gopalakrishnan