U.S. Commerce Secretary Gina Raimondo said the government is negotiating with Taiwan and TSMC to give Taiwan priority in providing much-needed chips to U.S. auto makers. A number of U.S. auto manufacturing companies said several factories had to shut down and tens of thousands of workers were laid off due to chip shortages.
Secretary Raimondo told a meeting hosted by the business community Tuesday (May 4, 2021), “We are making an effort to see if we can urge the Taiwanese and the big company TSMC to give priority to meeting the needs of our auto companies because there are so many American jobs at stake. As I’ve said, we’re working every day to make this happen.”
The Biden administration has been pushing Taiwan to do this since February of this year, but U.S. automakers say the supply of chips has not increased.
The shortage of automotive chips that began last December still plagues the U.S. and global auto manufacturing industry. Some analysts believe that the reason for the shortage of automotive chips, one because of the rebound in demand for cars after the new coronavirus epidemic is underestimated; the second is because chip makers give priority to higher volume and more lucrative consumer electronics like smartphones.
As the world’s largest chip producer, TSMC had issued a statement in late January promising to reallocate production capacity to support the global automotive industry.
TSMC Chairman Deyin Liu said last Sunday (May 2) that it expects to be able to meet customers’ minimum demand for automotive chips by the end of June, but that doesn’t mean the shortage of automotive chips will end when it does in two months.
Commerce Secretary Raimondo said that in the long run, the United States must improve chip production capacity and urged Congress to allocate funds to support the effort.
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