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Germany urges Taiwan to assist eradicate the scarcity of automotive chips

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© Reuters. Taiwan Semiconductor Manufacturing Co (TSMC) logo in Hsinchu

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By Michael Nienaber

BERLIN / TAIPEI (Reuters) – Germany has asked Taiwan to convince Taiwanese manufacturers to alleviate a shortage of semiconductor chips in the automotive sector that is hampering the fledgling economic recovery from the COVID-19 pandemic.

Automakers around the world are closing assembly lines due to semiconductor supply issues, which in some cases have been exacerbated by the actions of the former Trump administration against key Chinese chipmakers.

The shortage affected Volkswagen (DE 🙂 VOWG_p.DE, Ford Motor (NYSE 🙂 Co F.N., Subaru (OTC 🙂 Corp 7270.T, Toyota Motor (NYSE 🙂 Corp 7203.T, Nissan (OTC 🙂 Motor Co Ltd 7201.T, Fiat Chrysler Automobiles and other automakers.

In a letter from Reuters on Sunday, Federal Minister of Economics Peter Altmaier asked his Taiwanese counterpart Wang Mei-hua to raise the issue in talks with Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) 2330.TW, the world's largest chip manufacturer and one of the German main suppliers to be addressed.

"I would be happy if you could take up this matter and underline the importance of additional semiconductor capacities for the German automotive industry for TSMC," wrote Altmaier.

Altmaier said the goal is to enable additional capacities and deliveries of semiconductors in the short and medium term.

The German automotive industry has already had direct talks with TSMC about traveling deliveries, and TSMC has given "very constructive" signals to solve the problem, he wrote.

A spokeswoman for the German Ministry of Economic Affairs said she was following the situation very closely and was in talks with the automotive industry.

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In order to reduce the dependence on Asian suppliers and to avoid similar problems in the future, Berlin is now planning to increase state support to increase the production capacities of semiconductors in Germany and Europe, added the spokeswoman.

The Taiwanese Ministry of Economic Affairs said it had received diplomatic inquiries to alleviate the shortage of chips for the automotive sector, although it was unaware of Altmaier's letter.

She said she had started conversations with domestic chip suppliers upon request from other countries and asked them to "provide full assistance".

"The relevant supply and demand situation is also closely related to the plans of the automobile chip factories to reduce stocks in the off-season," said the ministry.

TSMC said in a statement that the problem of chip shortages is very important to them for auto companies.

"It's our number one priority and TSMC is working closely with our automotive customers to resolve capacity support issues," it said.

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