Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which commands more than half of the global foundry market, yesterday said it is taking “unprecedented actions” to boost supply of microcontroller units (MCU) by 60 percent this year to mitigate a severe automotive chip crunch.
The Hsinchu-based chipmaker’s remarks came after the US Department of Commerce wrapped up a second round of meetings with global semiconductor makers and buyers on Thursday in the latest efforts to solve an auto chip supply bottleneck.
“To support the global automotive industry, TSMC has taken unprecedented actions, including reallocating capacity from customers from other industries that are under pressure from high demand due to the acceleration of digital transformation,” the company said in an e-mailed statement.
“TSMC would increase 2021 output for MCUs, one of the key components in automotive semiconductor products, by 60 percent from the 2020 level, representing a 30 percent increase over the 2019 pre-pandemic level in this critical product category,” the statement said.
TSMC is the world’s biggest supplier of MCUs for vehicles, with a more than 60 percent share, tallies from the Market Intelligence and Consulting Institute (資策會) showed.
Automakers should adjust their long-standing just-in-time inventory management strategy to minimize risks of a supply-demand imbalance, MIC said.
While promising to work with companies in the auto supply chain, TSMC said that modernizing the just-in-time supply chain management system and increasing demand visibility is the path to avoiding a recurrence of the current shortage.
TSMC chief executive officer C.C. Wei (魏哲家) last month told investors that the company expects to see a sharp improvement in the auto chip shortage as it boosts production.
At the time, he said the auto supply chain is long and complex with its own inventory management practices.
From chip production to vehicle production takes at least six months, with several tiers of suppliers in between, he said.
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