Taiwan hopes to give China a chance for its money – at least in the short term.
The island’s economy minister told CNBC that Taiwan will remain competitive on semiconductors even as China ramps up its chip ambitions.
Wang Mei-hua, head of the ministry of economic affairs, pointed to Taiwan Semiconductor Manufacturing Company, saying that the world’s largest contract chip manufacturer “is globally competitive in foundry production because of their technical breakthroughs.”
“Taiwan will further develop our semiconductor industry. In the short term, I think we will remain competitive,” she told CNBC’s Emily Tan on Wednesday.
When asked if China’s push to develop its semiconductor industry worries Taiwan, she pointed out that Taiwan’s chip manufacturing industry has developed over the decades and is strong.
“We have a very efficient production base,” she said according to a translation of her commentary into Mandarin.
Worldwide shortage of semiconductors
Wang also said Taiwanese companies are doing their best to fulfill auto chip orders amid a global shortage.
Covid-19 lockdowns last year spurred demand for consumer electronics, leading to a shortage in the semiconductor sector. As a result, some car manufacturers have been forced to cut back or slow down production.
Our chip manufacturers are already producing at full capacity … by supplying more automotive chips, it is not only helping the global automotive industry, but also the global economic recovery.
Wang Mei-hua
Taiwan’s head of the Ministry of Economic Affairs
Demand for auto chips fell in April 2020, but picked up steam in August and September, Wang said.
“It’s not easy to make chips. They don’t come out the next day after you place an order,” she explained. “When car chip orders were dropped, other information and communications technology orders came in and took up capacity.”
“Our chip makers are already producing at full capacity,” she said. “But we spoke to them, they are aware that delivering more car chips will not only help the global auto industry but also the global economic recovery.”
Taiwan and its chip suppliers have also met with the US for talks. “I think Taiwan is very willing to be a friendly supply chain partner in semiconductors,” she added.
Happy about the Taiwanese economy
Wang was optimistic about the outlook for exports from Taiwan, which benefited from growing demand for laptops due to lockdowns and work-from-home arrangements.
“From August last year to January this year, our exports increased dramatically for six consecutive months. This has never happened before,” Wang said.
Reuters reported that Taiwan’s exports rose nearly 37% year-on-year in January to $ 34.27 billion, the highest monthly figure ever.
“So far, our exports have performed very well – not only in our advanced technology, but in many other sectors, including petrochemical textiles and machinery,” she said. “Global inventories have fallen and the economy is recovering, even our shipbuilding business is growing at double digits. This is where we are today.”
– CNBC’s Arjun Kharpal and Michael Wayland contributed to this report.