TSMC and Taiwan chip peers weigh new price hikes for autos.
 
http:// asia.nikkei.com/Business/Electronics/TSMC-and-Taiwan-chip-peers-weigh-new-price-hikes-for-autos
 
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TSMC, as one of just a handful of chipmaking giants, is well positioned to capitalize on surges in demand.
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Automakers look likely to face the twofold problem of being forced to cut back production due to a lack of semiconductors,
while at the same time swallowing higher manufacturing costs.
 
The chip shortage was triggered by the U.S. government's trade sanctions on Chinese companies including Semiconductor Manufacturing International Corp.
and has worsened because of a steep increase in demand from automakers.
 
The coronavirus pandemic forced automakers to sharply reduce vehicle production in the spring of 2020.
With China succeeding in curbing the spread of infections, however, the nation's auto market began to stage an astounding recovery, logging a year-on-year sales gain of 11% in June.
 
"We couldn't make bullish production plans as we thought of orders for chips and other parts in the following three months,
" an executive at a top Chinese carmaker said, the effects of the global infection spread in mind.
 
Another development began to appear in July. With the U.S. administration of then President Donald Trump toughening sanctions on Huawei Technologies,
the Chinese technology company began that month to place massive orders with TSMC and other Taiwanese makers to secure enough chips before
the new package of American sanctions was put into effect in September.
The "ferocious" orders, as an industry official in Taiwan described them, made TSMC and other local manufacturers unprecedentedly busy starting in July.
 
In mid-September after the launch of new U.S. sanctions on Huawei,
the Taiwanese chip industry was hit by a "second arrow" as word began to circulate that the Trump administration would aim its sanctions at SMIC.
Qualcomm of the U.S. reacted immediately, sending officials to TSMC, UMC and other Taiwanese makers of chips to procure them in large quantities in place of SMIC.
 
TSMC commands a little more than 50% of the world market for contract chip production.
The combined share of TSMC and UMC is about 60%.
But the two Taiwanese companies had already been busy trying to meet orders for chips for use in personal computers, game consoles and iPhones arising from
strong stay-at-home demand caused by the pandemic.
 
There was also a technological problem. SMIC produces low-end standard chips used in sensors and electric power sources and that offer small profit margins.
But they are indispensable to a variety of products.
 
more article
http:// asia.nikkei.com/Business/Electronics/TSMC-and-Taiwan-chip-peers-weigh-new-price-hikes-for-autos
 
 

What I don't understand is why doesn't these automakers also reach out to companies like Samsung?