Taiwan’s chip industry remains competitive despite China’s ambitions

Taiwan is hoping to give China a chance to make its money – at least in the short term.

The island’s economy minister told CNBC that Taiwan will remain competitive in semiconductors, even as China ramps up its chip ambitions.

Wang Mei-hua, head of the Ministry of Economic Affairs, referred to the Taiwan Semiconductor Manufacturing Company, and said that the world’s largest contract chip maker is “globally competitive in foundry manufacturing because of its technical breakthroughs.” .

“Taiwan will continue to develop our semiconductor industry. In the short term, I think we will remain competitive,” she told CNBC’s Emily Tan on Wednesday.

Asked whether China’s willingness to expand its semiconductor industry is of concern to Taiwan, she pointed out that Taiwan’s chipmaking industry has grown over decades and is strong.

“We have a very efficient manufacturing base,” she said, according to a Mandarin translation of her words.

Wang also said Taiwanese companies are doing their best to fulfill orders for auto chips amid a global shortage.

Covid-19 lockdowns last year created a surge in demand for consumer electronics, causing a shortage in the semiconductor industry. As a result, some automakers have been forced to cut back or slow down production.

Demand for automotive chips fell in April 2020, but accelerated in August and September, Wang said.

“It’s not easy to make crisps. It doesn’t come out the next day after placing an order,” she explained. “When automatic chip orders were reduced, other information and communications technology orders came in and took up capacity.”

“Our chipmakers are already producing at full capacity,” she said. “But we have had discussions with them, they are aware that providing more auto chips not only helps the global auto industry, but also the global economic recovery.”

Taiwan and its chip suppliers have also met with the United States for discussions. “I think Taiwan is very willing to be a friendly semiconductor supply chain partner,” she added.

Wang was optimistic about the outlook for Taiwanese exports, which have benefited from growing demand for laptops due to lockdowns and work-from-home deals.

“From last August to January of this year, our exports have increased dramatically for six consecutive months. This has never happened before,” Wang said.

Reuters reported that Taiwanese exports rose nearly 37% in January to $ 34.27 billion, the highest monthly figure on record.

“So far our exports have been going very well – not only in our high tech, but also in many other sectors, including textile petrochemicals, machinery,” she said. “Global inventories have fallen and the economy is recovering, even our shipbuilding business is growing by double digits. That’s where we are now.”

– CNBC’s Arjun Kharpal and Michael Wayland contributed to this report.