Taiwan’s Economics Ministry has said that Taiwan Semiconductor Manufacturing Co Ltd (TSMC) will prioritise production of auto chips if it is able to further increase capacity.
A ministry official said Minister Wang Mei-hua spoke to senior company executives on Sunday about the issue.
TSMC had told the ministry it will “optimise” the production process of chips to make it more efficient.
The world’s largest contract chipmaker stated that current production capacity is full, but had assured the ministry that “if production can be increased by optimising production capacity, it will cooperate with the government to regard automotive chips as a primary application”.
In another development, Germany has asked Taiwan to persuade Taiwanese manufacturers to help ease a shortage of semiconductor chips in the auto sector which is hampering its fledgling economic recovery from the COVID-19 pandemic.
The request was made in a letter from German Economy Minister Peter Altmaier.
The ministry said it would wait until it had received the letter before deciding on whether to contact TSMC again.
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 Trump administration’s actions against key Chinese chip factories.
The shortage has affected Volkswagen, Ford Motor Co, Subaru Corp, Toyota Motor Corp, Nissan Motor Co Ltd, Fiat Chrysler Automobiles and other car makers.
In 2020, auto chips accounted only for 3% of TSMC’s sales, lagging smartphones’ 48% and 33% for high performance chips.
In the fourth quarter, sales for TSMC’s auto chips jumped 27% from the previous quarter, but still only accounted for 3% of overall sales in the quarter.