Taiwan’s top trade official saw the global shortage of automotive chips as an opportunity for Taipei to build closer relations with Western nations.
“Everyone sees this situation and thinks they can no longer ignore Taiwan,” said John Deng, Taiwan’s trade representative, to the Financial Times. “This is definitely beneficial for Taiwan’s trade agenda.”
The comments follow weeks of lobbying by various governments with Taiwan, a global semiconductor production center, for more capacity to be allocated to automotive chips.
In January, Peter Altmaier, the German economy minister, asked his Taiwanese counterpart Wang Mei-hua to help ensure that Taiwan Semiconductor Manufacturing Company, the world’s largest contracted chip maker, would prioritize chips for use in cars. Tokyo and Washington have also been in contact with the Taiwanese government and TSMC directly about the shortage.
After an online meeting with U.S. government officials and company executives on supply chain cooperation on Friday, Wang said the Americans thanked Taiwan for its help with the automotive chip issue.
Intense government involvement has sparked political controversy in Taiwan. A local newspaper criticized in an editorial on Thursday what it called Wang’s intervention in private business activity.
The reaction was intense, especially as Germany traditionally avoided any recognition of Taiwan’s existence or close ties for fear of offending China. Beijing claims Taiwan as its territory and demands that other countries deny recognition of its de facto independence.
After Taiwan donated millions of medical facial masks to European countries last year, German Chancellor Angela Merkel’s spokesman did not even utter the word “Taiwan” when asked by journalists for a thanks.
“In the past, maybe some countries thought that if they got too close to Taiwan, it would be a problem and that China would punish them,” said Deng.
The shortage of automotive chips highlighted the importance of Taiwan and the crucial role it played in the semiconductor industry, he added. “This problem has shown the whole world that Taiwan is reliable and that Taiwanese companies are reliable.”
In the United States, the shortage of car chips has sparked discussions about the realization of the need to bring back more semiconductor manufacturing capacity, which was transferred to Asia many years ago.
General Motors will close three plants in the US this week and cut production at a South Korean plant due to shortages. Ford is cutting production this week at two factories and said last week that a chip shortage could cut profits this year by $ 2.5 billion.
Deng minimized the possibilities for a quick resolution of the shortage. “This is not going to happen,” he said, commenting on suggestions that building more chipmaking capacity in the United States should be accelerated to help ease the squeeze.
He said that recent discussions between governments were not having a direct impact on capacity allocation.
While TSMC accounts for more than half of the global foundry market, automotive chips account for only 3% to 4% of its revenue. In addition, car manufacturers do not buy chips directly from them, but from car suppliers. These, in turn, supply them from dedicated chip design companies, which outsource manufacturing to TSMC.
“It is natural for the government of each country to support its industry,” said Deng. “But it is a commercial decision. After all, business is business. “