SHOPSMART AUTOS – CUSTOMER INFORMATION – DECEMBER 26, 2021 -1
Taiwan Races To Remedy Car Chip Shortage Taiwan’s semiconductor-makers are racing to end a chip shortage that has forced carmakers to hit the brakes on production. But the Taiwanese government’s economic chief says it is still unclear when the crisis will be over. Taiwan’s Economy Minister Wang Mei-hua told NPR that Taiwanese microchip producers, such as world-leading Taiwan Semiconductor Manufacturing Co., have boosted production this year and are filling more auto-related orders. Demand for chips from other sectors isn’t likely to slacken, though, and with at least a five-month lead time for car chips, she said, it’s unclear when the shortage faced by automakers will ease. “Taiwanese foundries have begun to readjust their capacity and production since the beginning of this year,” Wang said in an interview late on Sunday, referring to chip factories. “In addition, because they have all understood that the shortage in auto chips has created a big impact in that industry, they are willing to adjust the order fill rates of auto chip customers, so that the order rate for auto chips is higher than that of other product categories,” she said.Article continues after sponsor message
Taiwan’s government is offering support on things such as infrastructure, she said, but it’s mostly a problem for the companies along the supply chain to resolve. Modern cars can have thousands of microchips in them to monitor and control things like tire pressure, climate control systems and the radio. Auto manufacturers around the world, from Ford and General Motors to Hyundai and Porsche, have been forced to scale back or halt production of some models due to the chip shortage.
Demand for cars dropped during the height of the coronavirus pandemic but has raced back, creating a lag between supply and demand of car-related chips. Industry experts think the problem will persist for months. Wang declined to speculate, saying chips often go through intermediaries before landing in carmakers’ warehouses,
putting the matter out of the hands of Taiwanese chipmakers. “We don’t actually know how long it would take for these auto chips that we have increased supply [of] to reach the end of the supply chain,” Wang said. A severe drought starting last year in Taiwan has compounded problems, forcing microchip manufacturers to scramble for ways to ensure sufficient water supply and economize its use. The semiconductor industry is a large consumer of water. Wang said water supply is now back to “normal” for industry.
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