The Taiwan Semiconductor Manufacturing Company (TSMC) has announced that it has increased automotive chip production by 60% compared to last year’s level. TSMC’s announcement came after attending the U.S. Department of Commerce’s Semiconductor Video Summit yesterday, which was attended by Commerce Secretary Gina Raymondo and representatives from several companies, including Intel Corporation, Amazon, Ford, and General Motors.
This top discipline was held under the auspices of the White House earlier this year and focused exclusively on the ongoing automobile chip deficit and ways that could alleviate the crisis in the public and private sectors.
TSMC Closes Supply Chain Corporation Promises Automakers
The announcement comes after announcing that Super Hot production for the automobile chip would start earlier this year. The run comes as the car industry faces a sharp supply-demand match after recovering from the current epidemic in a surprisingly early stage.
TSMC was represented by Mr Liu Dein, Chairman of the Company, and was hosted by Mr Rick Cassidy, Senior Deputy General Manager of the TSMC Corporate Strategy Office and Head of its Arizona Foundry.
Most of the products sourced from TSMC by automakers are microcontrollers. These are responsible for managing the computer-based functions of a vehicle and are extremely important for everyday work.
Their importance is highlighted by Tesla Inc’s decision to design and develop new microcontrollers for navigating the chip shortage. In its shareholder’s deck for the first quarter of this year, the company wrote:” In Q1, we were able to navigate through global chip supply shortage issues in part by pivoting extremely quickly to new microcontrollers, while simultaneously developing firmware for new chips made by new suppliers”.
Following the event, TSMC announced that it would increase microcontroller production by 60% this year to help the automotive sector manage the current deficit overall. This increase is higher than the Faber chip production level in 2020, and compared to the production of microcontrollers in 2019, it marks a 30% production growth. Microcontrollers accounted for 4% of TSMC’s overall sales in the first quarter of this year, up to one percent in the fourth quarter of 2020.
Compared to semiconductors used in consumer electronics, microcontrollers and other automotive chips have longer certification times, are not easily replaced after being installed in a vehicle, and require strict regulatory standards to be cleared.
TSMC also outlined steps it would take to improve the coordination of its supply chain with automakers. It promised to implement strict ‘just-in-time’ or lean supply chain management practices. These procedures only manage the order and delivery time to ensure that the product reaches a company when needed. By doing this, they ensure that innovations will not grow further and that manufacturers can prioritize production. In a statement released after the event, Secretary Raimondo shared her support for developing an American chip supply chain. In addition, chip industry executives have pressed the government to enable funding through the U.S. Chips Act, which will aid giant technology companies and others in developing leading-edge chip manufacturing technologies in the U.S.
While the United States traditionally enjoys technical leadership over Asian chip makers, TSMC’s rapid expertise in this area has brought both regions on an equal footing. Over time, the call for investment in the sector has grown as China has reoriented its focus on developing a chip sector of its own and has not been able to compete with any US-based FAB TSMC.
In her statement made after the event, the Commerce Secretary stated that: “Today was another opportunity to engage leaders from the semiconductor ecosystem, and I will continue to bring stakeholders together as we work to address our supply chain challenges. On Monday, I am headed to Micron Technology in Manassas, Virginia, to tour their fab, and I will be joined by Micron CEO Sanjay Mehrotra, Senator Mark Warner, and Senator John Cornyn.”
“These conversations crystalize the need for the American Jobs Plan’s $50 billion investment to ensure that the government has the ability to monitor supply chain issues and the remit and tools to address them. Passing funding for the CHIPS Act must be a priority, and I am encouraged by the bipartisan group of U.S. Senators who are working to get this done.”
