Germany asks TSMC to prioritize automotive chips

Germany asks TSMC to prioritize automotive chips

Business news |
By Peter Clarke

The automobile’s crippling shortage of semiconductors has become a political hot potato with Peter Altmaier, Germany’s Economy Minister, writing a letter asking his counterpart Wang Mei-hua to address the issue in talks with leading foundry TSMC, according to Reuters.

The component shortage has affected almost all major car makers including: Volkswagen, Ford, Subaru, Toyota, Nissan and Fiat-Chrysler, but is particularly significant to the German economy. It was partly driven by high demand from other sectors during 2020 driven by the pandemic. It was also partly a problem of the automotive sector’s own making. They usually operate just-in-time supply chains and when they closed down car plants in 2Q20 they suspended chip supplies.

Now that the car makers are trying to ramp up production they are finding capacity has been diverted elsewhere.

“I would be pleased if you could take on this matter and underline the importance of additional semiconductor capacities for the German automotive industry to TSMC, Reuters quotes Altmaier as writing.

Altamaier reportedly said his aim was to enable additional capacity and deliveries in the short-to-medium term. However, given that ICs can spend three months during the production and packaging process that is difficult to achieve.  He also wrote that the German automobile industry has received “very constructive” signals from TSMC about how to solve the problem.

However, it is notable that TSMC’s CEO, speaking on a conference call with financial analysts had said that TSMC is working with customers to try and move their mature node designs on to more advance nodes where TSMC has more capacity. However, that is also clearly a long-term strategy.

Related links and articles:

Europe will try to rebuild semiconductor capability using pandemic recovery funds

Germany pushes for more semiconductor independence from US, China

Report: Chipmakers raising prices 10 to 20 percent

Volkswagen faces massive chip shortages

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