U.S. Commerce Dept. pressing Taiwan to supply more chips to U.S. automakers

By David Lawder and David Shepardson

WASHINGTON (Reuters) -The U.S. Commerce Department is pressing Taiwan Semiconductor Manufacturing Co Ltd (TSM) and other Taiwanese firms to prioritize the needs of U.S. automakers to ease chip shortages in the near term, Commerce Secretary Gina Raimondo said on Tuesday.

Raimondo told a Council of the Americas event that longer term, increased investment was needed to produce more semi-conductors in the United States and that other critical supply chains needed re-shoring, including to allied countries.

"We're working hard to see if we can get the Taiwanese and TSMC, which is a big company there, to, you know, prioritize the needs of our auto companies since there's so many American jobs on the line," Raimondo said in response to a question from a General Motors Co executive. "As I said, there's not a day goes by that we don't push on that."

Raimondo added that "the medium- and long-term solution, though, is like very simply making more chips in America."

Since February, President Joe Biden's administration has been prodding Taiwan on the issue, but automakers have reported no boost in chip supplies.

The Commerce Department is planning a high-level meeting with automakers set to take place next week on the issue, said officials briefed on the matter. A Commerce Department spokesman declined to comment.

United Auto Workers Legislative Director Josh Nassar said in written testimony for a U.S. House hearing on Wednesday that the chips shortage has resulted in the layoffs of "tens of thousands of workers.... Clearly, we need to bolster domestic production of automotive-quality semiconductors."

Last week, Ford Motor Co warned the chips shortage may slash second-quarter production by half, cost it about $2.5 billion and about 1.1 million units of lost production in 2021.

GM said on Friday it would extend production halts at several North American factories because of the shortage.

On April 12, Biden convened semiconductor and auto industry executives to discuss solutions to the chip crisis. He backs $50 billion to support U.S. chip manufacturing and research.

(Reporting by David Lawder and David Shepardson; Editing by Peter Cooney)

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