TAIPEI (Taiwan News) — Taiwan Semiconductor Manufacturing Co. (TSMC) is responsible for around 70 percent of global contract manufacturing for automobile micro control units (MCUs).

Integrated device manufacturers (IDMs) design, produce, and sell integrated circuits, with automotive IDMs being key suppliers of chips to carmakers, analyst Cheng Kai-an (鄭凱安) at government-sponsored research firm Market Intelligence & Consulting Institute (MIC) said Tuesday (May 25), CNA reported. Car IDMs typically outsource around 15 percent of chip production — primarily MCUs — with TSMC accounting for between 60 to 70 percent of those orders, according to Cheng.

Car MCUs have numerous specifications and can require 40 nm, 45 nm, or 65 nm processes, and operating three separate production nodes can lead to extremely high operating costs. Therefore, IDMs will often outsource manufacturing for micro controllers, the analyst said.

The top five car IDMs that supply MCUs are the Netherlands’ NXP Semiconductors, Japan’s Renesas Electronics Corp, Germany’s Infineon Technologies AG, and the US’ Texas Instruments Inc. and Microchip Technology Inc., the institute said. These five companies outsource MCU production requiring 28 nm to 65 nm process technologies, MIC added.

TSMC has been able to secure around 60 to 70 percent of the MCU outsourcing market, making it a critical player in the automotive chip supply chain at a time when carmakers are desperately looking for chips. Last week, after a virtual semiconductor meeting held by the U.S. Department of Commerce, TSMC said it would increase MCU production by 60 percent this year to help alleviate the car chip crunch.