Amid a shortage of state-of-the-art semiconductor chips for auto innovation and other verticals, Taiwan’s Economics Minister is pledging that Taiwanese companies will put automakers first, with chips in short supply as self-driving technology takes off in a big way, feeding vast global demand.
Reuters reports an effort on the part of Economics Minister Wang Mei-hua to mollify auto industry stakeholders as they see the results of an industry under pressure. Mei-hua suggested that TSMC and Taiwan firms will prioritize auto chips over chips for other uses like videogame consoles.
“(Wang Mei-hua) met executives from Taiwan Semiconductor Manufacturing Co Ltd (TSMC), United Microelectronics Corp (UMC), Powerchip Semiconductor Manufacturing Corp and Vanguard International Semiconductor Corp,” reported Jeanny Kao and Yimou Lee.
The problem is widespread: Financial Times staff report Volkswagen, GM and Honda are looking for additional chip manufacturing capacity, and fighting for chip contracts with other businesses.
Meanwhile chip makers say they are operating at full capacity.
One problem is the complexity of today’s chips – from creating the delicate wafer substrate to encoding integrated circuits, this type of manufacturing is not something you can turn on a dime. It relies on high-tech nanoscale operations.
Furthermore, Chinese companies suggest that U.S. sanctions on firms like Huawei have further hurt semiconductor manufacturing in general.
“China’s top chipmaker Semiconductor Manufacturing International Corp. said Sunday that its addition to a U.S. export control blacklist will likely hamper its development of cutting-edge technologies,” reported Shunsuke Tabeta at Nikkei Asia Dec. 21.
Economists on both sides of the aisle in the U.S. can debate about whether the Chinese are using this as a pretext, or whether U.S./China trade conflicts in the tech sector are likely to depress semiconductor productivity at just the wrong time.
Investors should have a handle on what’s going on, not just in self driving cars, but with anything that uses microprocessor design, as the shortage will likely continue.
