LDN - Business

Three U.S. senators urge more Taiwanese help on automotive chip shortage -letter

[August 19, 2021] By David Shepardson

WASHINGTON (Reuters) -A trio of Democratic U.S. senators has asked the Taiwanese government for more help to address an ongoing chip shortage that has left numerous American auto production lines standing idle at times, according to a letter reviewed by Reuters.

The letter, dated Aug. 18 and not previously made public, was sent by Michigan Senators Gary Peters and Debbie Stabenow and Ohio's Sherrod Brown to Taiwan's de facto ambassador in Washington, Hsiao Bi-khim, praising his "efforts to address the shortage."

But the senators added they were "hopeful you will continue to work with your government and foundries to do everything possible to mitigate the risk confronting our state economies."

The shortage has spurred production cuts and layoffs and rippled through the economies of states that are heavily dependent on the auto industry.

Taiwan's Foreign Ministry told Reuters it was aware of the letter and had passed on the request contained within it to government departments in charge of trade and economics.

Taiwan and the United States "have been closely coordinating and communicating on supply chain issues", the ministry added. "We believe that Taiwan and the United States can jointly establish a safe and reliable supply chain for key industries."

Taiwan's Economy Ministry said it was not able to immediately comment.

Ford Motor Co on Wednesday said it would halt output for a week starting Monday at production lines that build its best-selling F-150 pickup trucks because of the shortage. General Motors Co suspended production for a week at three North American truck plants earlier this month because of the same issue.

Nissan Motor earlier this month halted output for two weeks at a major Tennessee plant due to the impact of COVID-19 in Malaysia and chip issues.

An auto trade group has estimated that because of the chip shortage, there could be 1.3 million fewer vehicles made in the United States in 2021, a drop of more than 10% from pre-pandemic levels.

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Newly manufactured Ford Motor Co. 2021 F-150 pick-up trucks are seen waiting for missing parts in Dearborn, Michigan, U.S., March 29, 2021. REUTERS/Rebecca Cook

The senators told Hsiao "what we are hearing at this point is that the risk of shortages clearly has extended into 2022, despite the considerable efforts in Taiwan to augment production."

Last month, Taiwan Semiconductor Manufacturing Co Ltd (TSMC) <2330.TW>, the world's largest contract chipmaker, said the auto chip shortage will gradually tail off for its customers from this quarter, but that it expects overall semiconductor capacity tightness to extend possibly into 2022.

TSMC declined to comment on the letter.

"Demand for vehicles - from cars to commercial trucks - is now up, yet the lack of semiconductor chips is preventing this renewed demand from being met," the senators wrote.

"At a time when our manufacturers should be adding extra shifts, they have had to idle U.S. plants or curtail production. The U.S. is now the most impacted region in the world."

The senators offered Taiwan help in addressing ongoing pandemic-linked issues.

"As policy leaders, we share a keen understanding of the challenge your country is facing and appreciate the steps you are taking to protect both the human and economic health of your country," they said.

In June, the United States sent Taiwan 2.5 million COVID-19 vaccine doses, more than three times the initial allocation of shots for the island.

The senators said they backed "President (Joe) Biden's efforts to make excess vaccines available to Taiwan."

(Reporting by David Shepardson in Washington; Additional reporting by Ben Blanchard in Taipei; Editing by Kenneth Maxwell and Bernadette Baum)

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