U.S. Commerce Dept. presses Taiwan for more chips to automakers

The logo of Taiwan Semiconductor Manufacturing Co (TSMC) is pictured at its headquarters, in Hsinchu, Taiwan

The U.S. Commerce Department is pressing Taiwan Semiconductor Manufacturing Co Ltd (2330.TW) and other Taiwanese firms to prioritise the needs of U.S. automakers to ease chip shortages in the near term, Commerce Secretary Gina Raimondo said.

Raimondo told a Council of the Americas event on Tuesday 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 said in response to a question from a General Motors Co (GM.N) 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.”

On Wednesday, TSMC said that tackling 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 said in a statement to Reuters.

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

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

Taiwan Economy Minister Wang Mei-hua told lawmakers in Taipei that many countries had sought help from the government and TSMC.

“However, TSMC has a commercial mechanism and must comply with commercial norms,” she said on Wednesday, without elaborating.

The Commerce Department plans a meeting with automakers next week on the chip shortage issue, said officials briefed on the matter. A Commerce Department spokesman declined to comment.

United Auto Workers Legislative Director Josh Nassar said in written testimony for a U.S. House hearing on Wednesday that the chip shortage had brought layoffs of “tens of thousands of workers.”

He added, “Clearly, we need to bolster domestic production of automotive-quality semiconductors.”

Last week, Ford Motor Co (F.N) warned the chip shortage might slash second-quarter production by half, costing it about $2.5 billion and about 1.1 million units of lost production in 2021.

On Friday, GM said it would extend production halts at several North American factories because of the shortage.

On April 12, President Joe Biden convened semiconductor and auto industry executives to discuss solutions to the crisis. He backs $50 billion to support U.S. chip making and research.

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