Taiwan says chipmakers to prioritise auto chips amid global shortage (updated)

Powerchip Semiconductor Manufacturing

27/01/2021 08:17

(Recasts, adds details, quotes, byline)
    By Jeanny Kao and Yimou Lee
    TAIPEI, Jan 27 (Reuters) - Four major Taiwanese chip makers
met the island's economics minister on Wednesday and told her
they were willing to prioritise supplies for auto makers amid a
global shortage of chips for the industry, the minister said.
    Automakers around the world are shutting assembly lines due
to problems in the delivery of semiconductors, which in some
cases have been exacerbated by the former U.S. administration's
action against key Chinese chip factories.  urn:newsml:reuters.com:*:nL1N2JP2MY
    The shortage has affected Volkswagen  VOWG_p.DE , Ford Motor
Co  F.N , Subaru Corp  7270.T , Toyota Motor Corp  7203.T ,
Nissan Motor Co Ltd  7201.T , Fiat Chrysler Automobiles and
other car makers.  urn:newsml:reuters.com:*:nL4N2JJ0JF
    Economics Minister Wang Mei-hua said she had met executives
from Taiwan Semiconductor Manufacturing Co Ltd (TSMC)  2330.TW ,
United Microelectronics Corp (UMC)  2303.TW , Powerchip
Semiconductor Manufacturing Corp  6770.TWO  and Vanguard
International Semiconductor Corp  5347.TWO .
    The companies had agreed to give priority to auto chips to
meet demand even as they were also trying to fill orders from
the electronics sector, Wang said.
    "Chipmakers are willing to follow the government's request
and try to support auto chips as much as they can to support
their production in the U.S., Europe and Japan," Wang told
reporters.
    Three of the companies did not immediately respond to
requests for comment.
    Vanguard declined comment ahead of their quarterly earnings
next week, referring Reuters to comments their chairman made
earlier this month in which he referred to an expected 15%
increase in demand for auto chips this year.
    The chip firms told Wang that they were in a very difficult
position given rising chip demand for electronics amid the
COVID-19 pandemic, with a work-from-home trend boosting demand
for laptops, tablets and smartphones, she said.
    "All four chipmakers mentioned that at the moment their
capacity is fully loaded and demand is bigger than supply, and
even their capacity is overloaded," Wang said.
    "They are willing to try to negotiate with clients of other
products to see which clients are willing to delay orders or cut
orders," she said.
    "They will try to optimise their production lines. For
example, if their capacity is at 100% now, they will try to
raise it to 102% or 103%, with the extra capacity going to make
auto chips."
    Wang, citing the chipmakers, said they had warned auto
companies early last year that it would be dangerous if they cut
orders during rising chip demand for electronics.
    "They did raise related warnings: if you are to cut orders,
it will be very difficult to resume orders," Wang told
reporters.

 (Reporting by Jeanny Kao and Yimou Lee; Writing by Ben
Blanchard
Editing by Himani Sarkar, Robert Birsel)
 ((ben.blanchard@thomsonreuters.com;))