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TAIPEI – Taiwan’s major chipmakers have vowed to “do their best” to tackle the chip shortage crippling the global auto industry, the island’s economic affairs minister said on Wednesday, but with lines production already operating at full capacity, she warned that the situation will take time to improve.
Economy Minister Wang Mei-hua also defended the island’s semiconductor manufacturers, saying they warned customers that cutting chip orders last year could be “dangerous” for them. vehicle supply chains.
His comments illustrate how the issue has taken on international political dimensions. The government of Taiwan has received requests from “like-minded” countries including the United States, Japan and the European Union through diplomatic channels, asking for help in alleviating chip shortages, Wang confirmed. .
Wang was speaking after a lunch meeting with executives from four companies – Taiwan Semiconductor Manufacturing Co., United Microelectronics Co., Vanguard International Semiconductor and Powerchip Semiconductor Manufacturing Corp. – which produce chips for automotive chip developers around the world such as NXP, Infineon, Renesas Electronics, Rohm and STMicroelectronics.
“All of these chipmakers’ production lines are already running at full capacity and some are even overloaded … But we have come to a consensus that our chipmakers will do their best to support customers in the auto industry in the United States, Europe and Japan, as there are. there are so many jobs at stake and it is crucial for the global economy, ”Wang told reporters after the meeting.
“They agreed to increase their load to between 102% and 103% or even more, with all the extra capacity prioritized at automotive-related chips.”
Chipmakers started optimizing and improving their production lines from late last year, she added, “but it really is a problem that cannot be fixed overnight. . “
In addition, the production of chips takes time. Manufacturing a general power management chip, for example, takes about 50 days, plus an extra week of packaging and testing before it can be shipped to chip developers. These chips then have to be integrated into modules and ultimately assembled into cars. For some advanced chips, production can take up to three months.
Wang said the four chipmakers have agreed to talk to customers in other areas to see if any of them can cut orders or delay shipments, so that chips for the auto industry can be priority. Nikkei earlier announced that chipmakers’ production capacity is fully booked until around the second half of 2021.
“It is not an easy task. It will involve complicated business negotiations,” Wang said, adding that chipmakers have contractual obligations and there is no guarantee that customers will agree to delay their orders. . “They still have to keep their promises to their other customers.”
Wang said Taiwanese manufacturers warned auto chip developers when they repeatedly cut orders in the first three quarters of last year that it could be “dangerous.” She added that auto chip shortages mainly affect traditional car makers rather than electric vehicles.
The lack of chips caused serious production disruptions for several companies: German Volkswagen cut production in China, while Ford slowed down some of its production in the United States Honda, Daimler and Nissan all cut production due to flea shortages.
The minister said the incident underscored the importance of the chip industry in Taiwan, the world’s second largest in terms of revenue after the United States.
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