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US Says Thanks Taiwan, But Urges Greater Chip Output

Tightness in semiconductor supplies over the past two years have in some cases caused automotive and consumer appliance production lines to shut down


Companies in Taiwan, home to the world's largest contract chipmaker TSMC, have said they expect tight supplies to continue this year and probably into 2023. File photo: AFP.

 

While expressing gratitude to Taiwan for its efforts to resolve a global shortage of semiconductors, the US on Friday asked for more streamlining of production to get output back on track.

Sandra Oudkirk, director of the American Institute in Taiwan – the de facto US embassy in Taipei – told an industry forum the Covid-19 pandemic has “stressed” the world’s trading system.

Tightness in semiconductor supplies over the past two years have in some cases caused automotive and consumer appliance production lines to shut down, and the US has repeatedly urged Taiwan, as a major chip producer, to do more.

“While Taiwan’s semiconductor companies continue to churn out chips at an increasingly fast pace, logistical challenges have stymied efforts to keep up,” Oudkirk said.

“We’ve all learned about the long supply chains stretching from the fab to the showroom. We have made improvements, but room exists for further progress,” she said, in a transcript provided by her office.

Oudkirk pointed to US Department of Commerce data that over the past two years the median chip inventory in the US has fallen from 40 days to fewer than five.

Companies in Taiwan, home to the world’s largest contract chipmaker TSMC, have said they expect tight supplies to continue this year and probably into 2023 even as they ramp up capacity expansion.

Oudkirk said the US appreciated the willingness of Taiwan’s firms to deal with the problem. “You stepped up production when the auto industry sent out a call for help; you have worked with educational institutions to ensure that we are preparing the next generation of engineers,” she added.

Washington has been keen to get more Taiwanese companies to follow TSMC’s lead and build plants in the US.

TSMC, a major Apple supplier, started construction last year at a site in Arizona where it plans to spend $12 billion to build a computer chip factory.

 

  • Reuters, with additional editing by George Russell

 

READ MORE:

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US Probes Chipmaker for Huawei Sanctions Violations – FT

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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.

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