Last week we told you that automotive manufacturers around the world were halting their production due to a shortage of microchips. Now, Taiwanese chipmakers are trying to solve the problem. They plan to prioritize getting microchip supplies to automakers, in order to get production back on track.
Companies like Ford to Volkswagen (among others) are shutting assembly lines due to microchip shortages. In some cases, the shortages have been exacerbated by the former U.S. administration’s trade actions against Chinese chip factories.
“Chipmakers are willing to follow the government’s request and try to support auto chips as much as they can to support (automotive) production in the U.S., Europe and Japan,” Taiwan’s Economics Minister Wang Mei-hua told the media earlier this week.
Chips and Politics
The issue has become a diplomatic one. German Economy Minister Peter Altmaier wrote to Wang to ask her for help in addressing the microchip shortage. Wang also said the U.S., European Union, and Japan have been in contact.
The chipmakers are prepared to negotiate with clients of other products too. The consumer electronics industry also needs massive amounts of these chips. Chipmakers are inquiring with clients to see if any are willing to delay or cut orders. They will also try to boost production to meet increased demand.
Chip makers (including Taiwan Semiconductor Manufacturing Co, United Microelectronics Corp., Powerchip Semiconductor Manufacturing Corp. and Vanguard International Semiconductor Corp.) are reported to be increasing production and prioritizing microchips for automakers.
Vehicle manufacturers have run into major microchip shortages in the past few months. The pandemic caused a massive shift to remote work (and school). That shift, in turn, drove demand for laptops, tablets and smartphones way up. Not to mention a new generation of video game consoles is being rolled out by Sony and Microsoft.
The microchip shortage has affected automakers including Volkswagen, Ford, Subaru, Toyota, Nissan and Stellantis.