Commerce Department presses Taiwan to supply more chips to U.S. automakers

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Commerce Secretary Gina Raimondo testifies before the Senate Appropriations Committee during a hearing in the Dirksen Senate Office Building on Capitol Hill in Washington, D.C., April 20, 2021.

Chip Somodevilla | Pool | Reuters

The U.S. Commerce Department is pressing Taiwan Semiconductor Manufacturing Co and other Taiwanese firms to prioritize the needs of U.S. automakers to ease chip shortages in the near term, Commerce Secretary Gina Raimondo said on Tuesday.

Raimondo told a Council of the Americas event that longer-term, increased investment was needed to produce more semiconductors in the United States and that other critical supply chains needed re-shoring, including to allied countries.

“We’re working hard to see if we can get the Taiwanese and TSMC, which is a big company there, to, you know, prioritize the needs of our auto companies since there’s so many American jobs on the line,” Raimondo said in response to a question from a General Motors executive.

“As I said, there’s not a day goes by that we don’t push on that,” she said, adding the medium- and long-term solution would be “simply making more chips in America.”

TSMC said that addressing the shortage remained its top priority.

“TSMC has been working with all parties to alleviate the automotive chip supply shortage, we understand it is a shared concern of the worldwide automotive industry,” it said in a statement to Reuters on Wednesday.

TSMC CEO C.C. Wei said last month the company had worked with its customers since January to reallocate more capacity to support the auto industry, but the shortage had worsened due to a snowstorm in Texas and a fab manufacturing disruption in Japan.

Wei expected the chip shortage for its auto clients to be greatly reduced from the next quarter.

The Commerce Department is planning a high-level meeting with automakers set to take place next week on the chip shortage issue, said officials briefed on the matter. A Commerce Department spokesman declined to comment.

United Auto Workers Legislative Director Josh Nassar said in written testimony for a U.S. House hearing on Wednesday that the chips shortage has resulted in the layoffs of “tens of thousands of workers … Clearly, we need to bolster domestic production of automotive-quality semiconductors.”

Last week, Ford Motor warned the chips shortage may slash second-quarter production by half, cost it
about $2.5 billion and about 1.1 million units of lost production in 2021.

GM said on Friday it would extend production halts at several North American factories because of the shortage.

On April 12, Biden convened semiconductor and auto industry executives to discuss solutions to the chip crisis. He backs $50 billion to support U.S. chip manufacturing and research.

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