Taiwan to increase chip production after shortage hits carmakers

TAIPEI: Taiwan on Thursday said it will try to ramp up production of vital computer chips after shortages hit the global auto industry, with some major manufacturers forced to suspend production lines.

Semiconductor shortages, caused by supply chain priorities changing because of the coronavirus pandemic, have hampered car production in recent weeks.

Taiwan's high-tech chip foundries are some of the world's biggest and most advanced, and so European car manufacturers have been reaching out to Taipei for help.

"Our government and chip manufacturers are mulling how to assist them," Minister of Economic Affairs Wang Mei-hua told reporters on Thursday.

"Taiwan is willing to help out during the pandemic and we can help them," she added.

When car sales fell at the start of the Covid-19 crisis last spring, many chip manufacturers switched production to consumer electronics, which saw rising demand as the pandemic kept people at home.

However, the auto market has since seen a rebound in sales, leading to critical bottlenecks in the supply chain.

In recent weeks Ford, Toyota and Volkswagen have all said they were slowing down or even stopping production at certain factories due to the shortfall.

Taiwan Semiconductor Manufacturing Company (TSMC) -- which runs the world's largest chip foundries -- said the auto industry was a "top priority" for the company, although its factories are already at full capacity.

"While our capacity is fully utilised with demand from every sector, TSMC is reallocating... to support the worldwide automotive industry," the company said on Thursday.

Wang said she spoke to industry representatives on Wednesday, including Germany's de facto ambassador to Taipei.

She said she hoped Europe would help Taiwan obtain vaccines for the coronavirus.

So far the island has survived the pandemic unscathed by largely closing its borders.

But it has struggled to locate adequate vaccine supplies.

"We need other countries to help Taiwan acquire vaccines, especially for medical workers as a top priority," Wang said.

"I told the German representative yesterday that we can help them acquire automotive chips to solve the problems facing the auto industry and we hope they can do what they can to help Taiwan acquire vaccines," she added.