As the growth of electric vehicles in China increases, the demand for chips is growing rapidly. According to the report, several major electric vehicle companies in China performed even better than expected last year such as NIO, Xpeng, Li Auto and of course BYD. One of these companies, with many years of experience, has a huge advantage and could even shake up the current dominance of Chinese electric car companies. And it’s Ford.
Why are chips in shortage for a long time?
Taiwan for its safety
First of all, TSMC is the world’s best chip manufacturer in terms of manufacturing customized-chips. Even though Samsung has a better track record in terms of total volume, most of the giant technology companies such as Apple accommodate their own chips to meet specific requirements.
However, in order to survive between China and the US, Taiwan has always controlled the production of chips, thus ensuring its safety especially for China.
Huge demand from China
As the largest EV market in the world, China is always seeking for chips for EVs. Under the national policy, China aims to achieve carbon neutrality in 2060 which increases the demand for “new energy intelligent vehicles”. Along with more traditional vehicle-manufacturers joining the EV party, the demand for customized-chips would be much larger than ever.
Why does Ford have an advantage on China’s EV market?
Ford is a US company. That’s it. For Taiwan, they need to be concerned about what they are going to do with the chips. If it’s BYD or NIO, they might have to take it more seriously since they are China’ companies. Taking Huawei as an example, after the sanction of the US, there are more than 60 firms affected. TSMC definitely does not want to cause any trouble and just wants to play safe.
This is the reason why Ford is so safe for TSMC, only because it’s a US company, and does not need to take national security into consideration.
Ford plans in China
“The Chinese market has become a leader in the transformation of the world’s automotive driving industry in the areas of intelligence and electrification. This was stated by Cheng Junhua”
“Globally, Ford is significantly increasing its investment in electrification. By the end of 2025, the company will have invested more than US$30 billion in electrification; electric vehicles are expected to account for 40-50% of Ford’s global sales by 2030; and by 2030, Lincoln will have electrified its entire vehicle range in global markets.”
Vice President of Business Operations and Corporate Development of Ford Motor China last year.
The world is always changing, at least Ford could order chips from TSMC easier. The shortage of chips happened during the pandemic which implies that once the world’s economics go normal, the shortage of demand will get bigger.
Maybe Ford’s can do well in the future, but the shortage of chips is affecting the whole world. No one can get behind it.
Latest Chip Update
“However, he believes that the demand side, including increased demand for high-performance computing and the wave of digital transformation, is the major issue and also a mess in supply-chain which needs to be addressed urgently.” said by Senior Vice President, TSMC in the end of Nov 2021.
The general manager of Foxconn, a world-leading chips manufacturer in Taiwan, expected that the tight semiconductor material situation will continue into the second half of 2022, which is longer than originally expected until the second quarter of 2022, and the short and long material situation will also be prolonged.
Supply chain disruptions, increased demand for high-performance computing and a wave of digital transformation are all exacerbating the chip shortage problem.
