TSMC 'Expediting' Auto Products Amid Chip Shortage

Taiwan Semiconductor Manufacturing Co (TSMC) is "expediting" auto-related products through its wafer fabs and reallocating wafer capacity, the company said on Thursday, amid a global shortage of auto chips.

Automakers around the world are shutting assembly lines due to the shortages, which in some cases have been exacerbated by the former US administration's actions against Chinese chip factories.

On Wednesday, Taiwan's economy minister said major Taiwanese chipmakers were willing to prioritise supplies for auto makers, after she met senior company executives including from TSMC.

In a statement, TSMC said it was addressing the chip supply "challenges" as their top priority.

"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."

In 2020, auto chips accounted only for 3 percent of TSMC's sales, lagging smartphones' 48 percent and 33 percent for high-performance chips.

In the fourth quarter, sales for TSMC's auto chips jumped 27 percent from the previous quarter, but still only accounted for 3 percent of overall sales.

The issue has become a diplomatic one, with German Economy Minister Peter Altmaier writing to his Taiwanese counterpart Wang Mei-hua to ask her for help in addressing it.

Wang said the other companies whose executives she met were from United Microelectronics Corp (UMC), Powerchip Semiconductor Manufacturing, and Vanguard International Semiconductor.

UMC Co-President Jason Wang, speaking on an investor call late Wednesday, said their fabs were also operating at a 100 percent utilisation rate and that they were trying to address the auto chip shortage.

"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."

UMC does not break down details for auto chips in terms of how much it makes up for in production or revenue exposure.

The shortage has affected Volkswagen, Ford Motor, Subaru, Toyota Motor, Nissan Motor, Fiat Chrysler Automobiles, and other car makers.

© Thomson Reuters 2021

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