U.S. to press Taiwan, industry leaders to resolve auto chip crunch

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Biden administration officials have called an ad-hoc meeting next week with Taiwan government and industry officials, during which they’re expected to pressure Taiwan Semiconductor Manufacturing Co. and its peers to ramp up the supply of vital chips to American automakers.

The virtual conference scheduled for Thursday would be the most high-profile meeting between newly appointed Biden administration officials and their counterparts from Taipei. Deputy Assistant Secretary of State Matt Murray and Acting Deputy Assistant Secretary of Commerce Richard Steffens are scheduled to confer with Taiwan Minister of Economic Affairs Wang Mei-hua, people familiar with the matter said. Executives from the island’s largest chipmakers including TSMC and MediaTek Inc. will also attend a discussion centered on resolving a global shortage of auto chips, they said.

The meeting is intended to forge closer ties between the two sides, the ministry said in a statement to Bloomberg News, without elaborating on the agenda or final attendance list. Chinese Foreign Ministry spokesman Zhao Lijian told a regular news briefing Friday he wasn’t aware of the meeting, but reiterated that Beijing “opposes official interactions between the U.S. and China’s Taiwan region.”

Global automakers such as General Motors, Ford Motor Co. and Volkswagen Group face potentially $61 billion of lost revenue for the year because they can’t secure enough of the chips that go into a plethora of vehicle parts. TSMC and other Taiwanese companies are among the world’s most sophisticated chipmakers and produce a significant portion of the semiconductors for everything from cars to laptops.

This week, TSMC vowed to reallocate capacity to support the global automotive industry. Some industry observers say the shortage stemmed from near-sighted planning and under-estimation of a post-COVID rebound in automobile demand, while others argue chipmakers are prioritizing higher-volume and more lucrative consumer electronics such as smartphones.

The quagmire reveals the risks for automakers as vehicles become smarter and technologically more complex.

The people familiar with the meeting details asked not to be identified talking about a private arrangement that has yet to be made public. A spokesperson for the U.S. State department declined to comment. Representatives for the U.S. Commerce Department, TSMC and MediaTek didn’t respond to requests for comment.

“We continue to engage with government officials as this remains a critical issue,” said Matt Blunt, president of the American Automotive Policy Council, the lobbyist for the Detroit-based automakers GM and Ford as well as the U.S. operations of Stellantis. “We are grateful for the Biden administration’s ongoing assistance and hope it can continue as more key positions are filled.”

The meeting will take place as Biden’s administration signals strong backing for an island China claims as its own. The U.S. State Department this week urged China to engage in a dialogue with Taiwan and halt military pressure on the island, in an early nod of support for Taipei.

Disputes over Taiwan, which has been one of the biggest flash points between the U.S. and China since the Cold War, have returned to the fore as Washington steps up support for Taiwanese President Tsai Ing-wen.

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