US Presses TSMC For More Chips For Car Makers

Global silicon shortage continues, as US Commerce Department presses Taiwanese chipmakers to ease the supply pain for car makers

The US Commerce Department has asked Taiwanese chipmakers to prioritise the needs of American car makers suffering from the ongoing silicon shortage.

The Commerce Dept pressed both Taiwan Semiconductor Manufacturing Co and other Taiwanese chipmakers to ease chip shortages in the near term for US car makers, Commerce Secretary Gina Raimondo was quoted by Reuters as saying on Tuesday.

Forrester Research warned last week it expects the chip supply issues to extend through next year and into 2023.

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Longer time aim

According to Reuters, Commerce Secretary Raimondo told a Council of the Americas event that longer-term, increased investment was needed to produce more semiconductors in the United States and that other critical supply chains needed re-shoring, including to allied countries.

“We’re working hard to see if we can get the Taiwanese and TSMC, which is a big company there, to, you know, prioritize the needs of our auto companies since there’s so many American jobs on the line,” Raimondo was quoted as saying in response to a question from a General Motors executive.

“As I said, there’s not a day goes by that we don’t push on that,” she said, adding the medium- and long-term solution would be “simply making more chips in America.”

GM is one of a number of US car makers that has extended production cuts at least three of its North American factories.

Addressing shortages

TSMC meanwhile was quoted by Reuters as saying that addressing the shortage remained its top priority.

“TSMC has been working with all parties to alleviate the automotive chip supply shortage, we understand it is a shared concern of the worldwide automotive industry,” it was quoted as saying in a statement to Reuters on Wednesday.

TSMC CEO C.C. Wei said last month the company had worked with its customers since January to reallocate more capacity to support the auto industry, but the shortage had worsened due to a snowstorm in Texas and a fab manufacturing disruption in Japan.

Wei expected the chip shortage for its auto clients to be greatly reduced from the next quarter.

Last week, Ford warned the chips shortage may slash second-quarter production by half, cost it about $2.5 billion and about 1.1 million units of lost production in 2021.

Executive order

It should be remembered that US President Joe Biden signed an executive order on 24 February to tackle a number of pressing shortages for four critical products.

That included semiconductor chips, electric vehicle batteries and rare earth minerals.

President Biden also announced he would seek $37 billion in funding to ‘supercharge’ chip manufacturing in the United States, and try to lessen its reliance on chip manufacturing in Asian factories.

On 12 April President Biden also met with the CEOs of nearly 20 major companies in the United States to discuss the global semiconductor shortage.

That White House meeting was billed as the “CEO Summit on Semiconductor and Supply Chain Resilience” and besides the US President, White House National Security Advisor Jake Sullivan and National Economic Council Director Brian Deese also attended.

Among the CEOs Biden met with was General Motors boss Mary Barra, Ford Motor CEO Jim Farley and Chrysler-parent Stellantis CEO Carlos Tavares.

The CEOs of GlobalFoundries, PACCAR, NXP Semiconductors, Taiwan Semiconductor Manufacturing Company, AT&T, Samsung, Alphabet, Dell, Intel, Medtronic, Northrop Grumman, HP, Cummins and Micron Technology also attended.