TAIPEI -- Taiwan Semiconductor Manufacturing Co. is to fast-track crucial chips for cars in a dramatic move by the world's biggest contract chipmaker to ease a semiconductor shortage that is crippling the global automotive industry, Nikkei Asia has learned.
TSMC expects to bring in so-called "super hot runs" for automotive chips to cut production cycle times by up to 50%, sources familiar with the matter said, as carmakers scramble to secure supplies.
But it means production of other chips could be affected as TSMC prioritizes auto components in its Taiwan plants, which are already running flat out to supply chips for in-demand tech gadgets.
"Imagine that you have to allow several super high-speed trains to pass along the lines. That will really increase cost and affect all the planning, and means all the others need to wait on the side and total output will be affected. ... That's not easy, and no chip manufacturers will easily agree to that unless it's a contingency," a chip industry executive told Nikkei Asia.
The rare move by TSMC comes after Taiwan's Economics Minister Wang Mei-hua met executives of four leading chipmakers, including TSMC, on Wednesday and said all had agreed to "do their best" to support the car industry.
Taiwan has had requests from countries such as Germany, Japan and the U.S. asking Taiwan to help look into the lack of chips for the auto industry, which has led to production cuts by leading carmakers including Volkswagen, Ford, Nissan Motor and Honda.
TSMC supplies almost all the world's key auto chip developers including NXP, STMicroelectronics, Infineon, Renesas Electronics, On Semiconductor and others. These chip developers in turn sell to carmakers and auto parts suppliers.
Most auto chips normally need at least 40-50 days from start to end. A super hot run by TSMC could help it reduce that to 20-25 days or even shorter. But most chip manufacturers will not easily agree to initiate such a hot run to produce chips as it will cut the production equipment's performance, reduce yields and increase costs. Customers generally must pay a premium for such expedited production.
TSMC spokesperson Nina Kao told Nikkei Asia that the company is currently expediting these critical automotive products through the company's chip manufacturing facilities, and said the company will help "reduce the cycle time" of the production of those car-related chips.
She said her company is also talking to other customers to see if they are able to reallocate some capacity to support the automotive industry.
"TSMC also continues to closely communicate with all customers, government representatives and industry associations from the U.S., Japan and Europe to help alleviate the global chip shortage issue," the company said.
After yesterday's meeting Wang defended the island's semiconductor manufacturers, saying they had warned customers that reductions in chip orders last year could be "dangerous" for vehicle supply chains.