White House Presses Taiwan On Semiconductor Shortage

Matt Posky
by Matt Posky

Automakers around the globe have been issuing warnings for weeks that the semiconductor shortage will eventually result in fewer cars and leaner profitability reports. But the absent chips are affecting just about every industry producing modern connected devices, creating fears that electronic prices could skyrocket as availability dwindles. Lockdowns effectively crippled semiconductor supply lines right as demand peaked and everyone is starting to get a little worried about how it’s going to impact production in other industries.

The White House is reportedly taking steps to mitigate the issue by tasking Brian Deese (Director of the National Economic Council) and Jake Sullivan (National Security Adviser) with coming up with a solution. It’s also asking embassies to assist chip suppliers around the world however possible and hopefully suss out a way to stop the global shortage. Meanwhile, Deese and Sullivan will be focusing the brunt of their efforts on Taiwan.

Having already discussed the issue with American automakers, the White House’s next phase looks to involve gently pressuring Asian chip suppliers to prioritize U.S. businesses. Semiconductors are overwhelmingly manufactured by companies based in China, Japan, Singapore, South Korea, and of course Taiwan.

According to Bloomberg, Deese issued a letter to Taiwan’s Minister of Economic Affairs, Wang Mei-hua, to request cooperation in dealing with supply chain issues. However, Wang told reporters on Thursday that she hadn’t received any such letter — noting that she was still busy dealing with the global chip shortage.

But there are factors making this whole issue a lot harder than its needs to be for both parties. China has continued to escalate military and diplomatic pressure against the democratic island nation and demand for semiconductors isn’t going to go down unless the whole world opts to use fewer electronic devices moving forward. Neither matter has an obvious solution and both seem like they’re poised to come to a head within the next few years.

From Bloomberg:

Taiwan is home to the largest semiconductor manufacturing industry in the world, and also relies on U.S. weapons to defend against China, which views the island as part of its territory and has threatened to use force if Taipei moves toward formal independence.

The Biden administration has also asked U.S. embassies around the world to identify how foreign countries and companies that produce chips can help address the global shortage and to map the steps taken to date, the spokesperson said.

Expect tough times for the automotive industry regardless of how well the plan works, however. Automakers have known about the chip shortage since December 2020 while the U.S. government was distracted with infighting and still hamstrung by pandemic restrictions. Most car builders have since suggested major declines in output for the first part of 2021. This week, IHS Markit likewise estimated almost 1 million fewer passenger vehicles will be produced in the first quarter and just keeps rising.

[Image: Orhan Cam/Shutterstock]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • Jkross22 Jkross22 on Feb 19, 2021

    Another reason to keep using what we have instead of buying a new, shiny object because reasons. Let's maintain what we already have before we go out and buy garbage we don't need. Reduced consumption is a good thing, and I'm not even talking about the materials cost or environment. Pretty sure happiness isn't found on the latest phone screen or insipidly large infotainment touchscreen. We should stop looking for it there. Oh yeah, and right to repair legislation would help this effort, too.

    • See 2 previous
    • Old_WRX Old_WRX on Feb 19, 2021

      Luke42, "reduce, REUSE, recycle" I'm not quite sure what you are getting at. Are you trying to say "reuse" covers build to last, repair, rebuild?

  • Akear Akear on Feb 19, 2021

    Due to prolonged outsourcing and lack of investment in technology, America is becoming more reliant on other nations for its economic survival. The US has to commit more money to chip fabrication development. The issue of America's inability to fabricate chips has become a national embarrassment.

    • See 3 previous
    • Daniel J Daniel J on Feb 20, 2021

      The united states has the ability, just not cheaply. Intel is even pushing more of theirs to be made in Taiwan.

  • AZFelix Hilux technical, preferably with a swivel mount.
  • ToolGuy This is the kind of thing you get when you give people faster internet.
  • ToolGuy North America is already the greatest country on the planet, and I have learned to be careful about what I wish for in terms of making changes. I mean, if Greenland wants to buy JDM vehicles, isn't that for the Danes to decide?
  • ToolGuy Once again my home did not catch on fire and my fire extinguisher(s) stayed in the closet, unused. I guess I threw my money away on fire extinguishers.(And by fire extinguishers I mean nuclear missiles.)
  • Carson D The UAW has succeeded in organizing a US VW plant before. There's a reason they don't teach history in the schools any longer. People wouldn't make the same mistakes.
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