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Taiwan Semiconductor Manufacturing Co (TSMC) will prioritize the production of automotive chips if it is able to further increase capacity, the Taiwan Ministry of Economy said on Monday after Minister Wang Mei-hua spoke with company executives.
A ministry official said Minister Wang Mei-hua spoke to company executives on Sunday about the matter.
TSMC told the ministry that it will “streamline” the chip production process to make it more efficient and prioritize the production of automotive chips if it is able to further increase capacity, the ministry said.
TSMC, the world’s largest contracted 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 automotive chips as a primary application. “
TSMC, in a statement to Reuters, referred to the comments of its CEO CC Wei in a results conference call this month.
“In addition to continuously maximizing the use of our existing capacity, Dr. Wei also confirmed at our investor conference that we are working closely with customers and moving some of their mature nodes to more advanced ones, where we have the best capacity to support them. them “. said the company.
Germany asked Taiwan to persuade Taiwanese manufacturers to help reduce the shortage of semiconductor chips in the automotive sector, which is hampering its nascent 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 until it received the letter before deciding whether to contact TSMC again.
Automakers around the world are closing assembly lines due to problems in the delivery of semiconductors, which in some cases have been aggravated by the actions of the former Trump administration against China’s main chip factories.
Many automakers affected
The shortages affected Volkswagen, Ford Motor, Subaru, Toyota Motor, Nissan Motor, Fiat Chrysler Automobiles and other automakers.
The ministry told Reuters it received requests from the United States and the European Union through “diplomatic channels” at the end of last year, as well as from Germany and Japan this year.
He said that in the second quarter of last year, automotive companies cut orders to TSMC, which in turn transferred capacity to other customers, but in the second half of the year demand for automotive chips returned.
“The Americans expressed expectations at the end of last year,” said the ministry.
“At the moment, everyone is talking to each other through diplomatic channels, including TSMC. Everyone has their hands tied with orders, but from the government’s point of view we will try to help as much as we can for our important allies.”
A senior official from Japan’s Ministry of Economy, Trade and Industry told Reuters that Japan’s automaker association and TSMC were already in contact, and that the ministry also contacted Japan’s de facto embassy in Taipei to ask for their support in these negotiations.
The official added that it is mainly a private sector grant, so the government is limited in what it can do.
In 2020, automotive chips accounted for only 3% of TSMC’s sales, trailing smartphones by 48% and 33% for high-performance chips.
In the fourth quarter, sales of automotive chips from TSMC increased 27% over the previous quarter, but still accounted for only 3% of total sales in the quarter.
A senior Taiwanese government official familiar with the matter told Reuters there was not much they could do.
“They withdrew their orders for a variety of reasons, when demand was low amid the pandemic. But now they want to increase their production.”