With Carmakers Struggling With Shortage, Auto Chip Production Ramped Up By TSMC

Amid a global shortage of chip, one of the market leaders of the industry the Taiwan Semiconductor Manufacturing Co Ltd (TSMC) has said that it is “expediting” auto-related products through its wafer fabs while also reallocating wafer capacity.

The worst hit industry because of the chip shortage is the global automobile market as vehicle makers all around the world have been forced to shut down production because of the shortages. The chip shortage is has been exacerbated by the sanctions imposed on Chinese chip factories by the administration of the former United States president Donald trump.

After a meeting with senior executives from chip makers of Taiwan, including from TSMC, the economy minister of the country had said previously that the major Taiwanese chip makers were ready to prioritise manufacturing and supplying of chips for auto makers.

The company was tackling the chip supply “challenges” as their top priority, TSMC said in a statement.

“The automotive supply chain is long and complex and we have worked with our automotive customers and identified their critical needs,” the world’s largest contract chipmaker said.

“TSMC is currently expediting these critical automotive products through our wafer fabs. While our capacity is fully utilised with demand from every sector, TSMC is reallocating our wafer capacity to support the worldwide automotive industry,” it added in the statement.

Just 3 per cent of the total sale of TSMC was accounted for by auto chips in 2020 while chips for smartphones made up 48 per cent and high-performance chips made up the rest 33 per cent of the total sales of the company last year.

Despite a 27 per cent surge in the sale of auto chips by TSMC in the fourth quarter of last year, the number still accounted for only 3 per cent of the total chip sales by the Taiwanese company.

The shortage has also turned out to become a diplomatic issue. The topic of shortage of auto chip formed the major content of a letter from the German Economy Minister Peter Altmaier to his Taiwanese counterpart Wang Mei-Hua in which the German minister asked for help in resolving the matter.

Apart from TSMC, Wang also met executives from United Microelectronics Corp (UMC), Powerchip Semiconductor Manufacturing Corp and Vanguard International Semiconductor Corp, she said.

Their fabs were also operating at a 100% utilisation rate and the auto chip shortage issue was attempted to be addressed by them, said UMC Co-President Jason Wang while speaking on an investor call late Wednesday.

“It’s hard to increase the capacity. It’s more about re-prioritising. Prioritising the automotive market, so hopefully, we can relieve some of the pressure,” he said.

“Some of the capacity increase will come from productivity improvement and for those the priority will probably be allocated to automotive at the current time.”

However there will be no change in eth commitment of the company towards their non-auto customers, said UMC Chief Financial Officer Chitung Liu.

Since integrated chips for auto use are used in high-temperature and high-pressure operating environments, therefore such chip needs to be highly reliable and have a long lifespan, said Taipei-based research group TrendForce in a research note last week.

“So it is usually not easy to switch over production lines and supply chains,” it said.

(Adapted from HindustanTimes.com)

Categories: Economy & Finance, Regulations & Legal, Strategy, Sustainability, Uncategorized

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