SHOPSMART AUTOS – CONSUMER INFORMATION – MAY 8, 2021 (PART TWO)
Taiwan Races To Remedy Car Chip Shortage China’s government has cranked up pressure on Taiwan with military flights and naval exercises near the island in recent months. It has also been squeezing it on the international stage, where the number of countries that afford Taiwandiplomatic recognition is dwindling. Wang said the semiconductor shortage was a “unique opportunity” for Taiwan. “We are very happy to see that because of the current global situation, the world is paying attention to Taiwan,” she said. “We believe that this kind of economic situation is also a guarantee of Taiwan’s national security.” But the chip bottleneck and heightened geopolitical tensions have spurred planning in both China and the United States for greater self-sufficiency in microchip production. Not only are tensions high between Taiwan and China, but relations between China and the United States are at their worst in decades, and technology is at the center of the friction between the world’s two largest economies. President Biden, joined by top foreign and domestic policy advisers, met virtually with 19 CEOs this month to discuss the growing shortage of semiconductors, a key component of many computerized electronics.
American chipmaker Intel plans to spend $20 billion on new chip factories that could help address a chip shortage, according to the Wall Street Journal. Meanwhile, China has been laying the policy groundwork to develop its semiconductor industry, spurred in part by U.S. efforts to limit sales of high-tech products that are deemed likely to help China develop its military. Beijing has poured money into the sector, and Chinese companies have been scrambling to poach semiconductor talent from abroad.
In February, National Economic Council Director Brian Deese wrote a letter to Wang asking for assistance in easing the auto chip shortage. Wang said Taiwan’s leading position in cutting-edge semiconductors, built over decades, and close cooperation with the U.S. in tech puts it in a unique position to continue to lead. Still, she said the “new situation” between China and the U.S. means that Taiwan companies face the need to diversify production and supply chains, which have been heavily reliant on, and often based in, China. Incentives to do so by the government of Taiwanese President Tsai Ing-wen led to the biggest wave of reshoring — bringing companies back to the island — in two or three decades, she said, with investment of about $43 billion in Taiwan. “In addition, if any company is interested in investing in the EU or the U.S. as a diversification of the operation and production, our government will also provide the assistance they need,” she said.
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