Shortage of Chips causing car factories to stop production around the globe.
As major car manufacturers around the globe continue to face a chip shortage for the production of motor vehicles, they are seeking the assistance of their politicians to assist in speaking to chip manufacturers to get their factories moving again. One of the worlds biggest manufacturers of chips is in Taiwan and German car brands need their help immediately.
In a letter seen by Reuters on Sunday, the German Economy Minister Peter Altmaier is requesting assistance from his Taiwanese counterpart Wang Mei-hua to address the issue in talks with a chip manufacturer, Taiwan Semiconductor Manufacturing Co Ltd (TSMC), which happens to be the world’s largest contract chipmaker and one of Germany’s main suppliers.
The Ministry of Economic Affairs (MOEA) said on Sunday that it has talked with domestic chip manufacturers to help meet growing global demand for automotive semiconductors, in response to an alleged request by Germany for Taiwan to help address a shortage of chips in its auto industry.
TSMC Expansion
Taiwan Semiconductor Manufacturing Company (TSMC) said over some earnings call on Thursday (Jan. 14) that it will raise its capital spending this year to as much as USD28 billion amid surging demand.
The world’s largest contract chipmaker announced it is budgeting USD25-28 billion for capital expenditures this year, up from USD17.2 billion in 2020, TSMC CFO Wendell Huang commented in a phone interview. Around 80 percent of the capital expenditure (capex) budget will be used to develop the company’s 3 nm, 5 nm, and 7 nm processes, another 10 percent will go to its 3D chip-stacking and packaging technologies, and the remaining 10 percent will be used to develop specialty processes.
Chips Used Everywhere
5G smartphones will soon make up around 35 percent of smartphone sales in 2021, up from 18 percent in 2020. TSMC is now forecasting its revenue will grow at a compound annual rate of 10-15 percent for the next five years, up from previous estimates of 5-10 percent.
The Technology Clients
TSMC produces auto-related chips for clients such as NXP, STMicroelectronics, Infineon, and Renesas Electronics.
Auto Manufacturing Stagnant
Meanwhile, Volkswagen has been forced to reduce production in Germany because of a lack of semiconductors. Analysts say the automaker could win damages if their suppliers (Bosch and Continental) and ordered too few chips to meet their delivery obligations.
Volkswagen is not the only auto manufacturer affected by this chip shortage. Toyota, Honda, Nissan, Ford, Fiat and even Jeep is having production delays due to semiconductor supply issues.
Last month, German tier-1 suppliers Continental and Bosch stated that the slow start-up of semiconductor manufacturing could affect vehicle production around the world.
