Global chip shortage: Taiwan sees “balance” in the supply of car chips in the fourth quarter

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Global supply and demand for car chips should reach “equilibrium” by the fourth quarter of 2021, the Taiwanese government said on Saturday, reiterating its commitment to do its part to remedy a shortage that has shut down production lines around the world.

US Democratic Senators from Michigan and Ohio this week asked the Taiwanese government to help address the shortage, as the island is a major semiconductor producer and is seen as a central part of efforts to resolve the problem.

In response to the letter, Taiwan’s Ministry of Commerce stated that the island’s chipmakers were not the main suppliers to the overseas integrated device manufacturers that make car chips.

“But relevant chip manufacturers cooperate fully with customers from all over the world, respond positively to their needs in this regard and help in solving the problem of automotive chips,” it says.

Economy Minister Wang Mei-hua was personally involved in talks with Taiwan’s chipmakers who said they had and will continue to “actively resolve” the problem during the first half of this year, the ministry added.

“Although the chain of the automotive chip industry is long and complex, the industry estimates that the supply and demand for chip manufacturers for car chip production will be balanced in the fourth quarter of this year with the full cooperation of our country’s companies.”

The subject has taken on a heavily diplomatic tinge as Taiwan seeks to reassure the United States, its main international supporter and arms supplier, that it is doing everything in its power, especially at a time when Taipei is under increasing military pressure from China exposed sees Taiwan as its own.

The ministry noted that Taiwan’s semiconductor companies were expanding production and stressed that these companies, as well as the government, placed great emphasis on working with “like-minded partners,” in which Taipei refers to other democracies such as the United States and the European Union.

Taiwan “will continue to work together to build a safe, trustworthy and resilient supply chain and deepen economic and trade ties to lay a solid foundation for post-pandemic economic recovery,” it added.

Last month, Taiwan Semiconductor Manufacturing Co Ltd (TSMC), the world’s largest contract chipmaker, said the scarcity of auto chips would gradually ease for its customers starting this quarter, but expected the overall semiconductor capacity shortage to potentially extend into next year.

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