Chipmakers reallocate wafer capacity to ease global chip shortage for vehicles
Published: Jan 28, 2021 09:23 PM

More than 4,000 vehicles produced by Chinese automakers wait to be loaded on a ship in Lianyungang, East China's Jiangsu Province over the weekend. The cars will be exported to countries including the UK and Belgium. Photo: cnsphoto

Chip producers in China are churning out wafers to support carmakers around the world while a global shortage of vehicle chips persists, leaving some automakers around the world with no choice but to shut down assembly lines. 

The world's largest contract chipmaker, Taiwan Semiconductor Manufacturing Co (TSMC), said that it is expediting critical automotive products. 

In a statement on Thursday, the company said it is addressing chip supply challenges affecting the automotive industry as a "top priority." 

"TSMC is currently expediting these critical automotive products through our wafer fabs. While our capacity is fully utilized with demand from every sector, TSMC is reallocating our wafer capacity to support the worldwide automotive industry," read the statement. 

In the fourth quarter last year, sales for TSMC's auto chips soared 27 percent from the third quarter, TSMC's report showed. 

Judging by orders at wafer plants, the chip supply shortage may last for a while, semiconductor giant China Resources Microelectronics told the Global Times in a statement on Thursday. The company said that it will reallocate capacity to maximize profits and secure supplies for its core customers and strategic partners.

After struggling to survive the COVID-19 pandemic and sluggish sales, the auto industry wasn't prepared when buyers came back. 

Starting from the end of last year, a global shortage of auto chips pinched carmakers amid a gradual recovery from the pandemic. The shortage may cause more than $14 billion in lost revenue in the first quarter and some $61 billion in 2021, Bloomberg reported, citing estimates from consulting firm Alix Partners. 

Elon Musk, CEO of US electric vehicle maker Tesla, said on a call about fourth-quarter earnings on Wednesday that the chip shortage may result in a short-run impact on the company, and it's doing its utmost to cope, according to media reports.

"Amid rising demand for electronic equipment and insufficient wafer capacity, some large plants stocked up. But if wafer capacity remains low, the shortage will worsen in the short term," Zhang Xiaorong, director of the Cutting-Edge Technology Research Institute, told the Global Times.

However in other sectors such as 5G, data centers, artificial intelligence and the industrial internet, China Resources Microelectronics said there will be a historic opportunity for China's semiconductor industry to boom. 

"With the containment of the coronavirus and the capacity recovery in China, Chinese semiconductor players may have a chance to restructure the industry chain while overseas major plants are being shut down," the company said.