DETROIT (AP) – The growing global shortage of semiconductors for automotive parts is forcing major automotive companies to stop or reduce vehicle production just as they are recovering from the closure of pandemic-related factories.
Officials at Volkswagen, Ford, Fiat Chrysler, Toyota and Nissan said they were hit by the scarcity and were forced to delay the production of some models to keep other plants running.
“This is absolutely an industry problem,” Toyota spokesman Scott Vazin said by email on Friday. “We are evaluating the restriction on the supply of semiconductors and developing countermeasures to minimize the impact on production.”
If the chip shortage persists, production cuts could reduce the stock of cars, trucks and SUVs for sale in the United States and other markets. This comes at a time when the industry was just beginning to replenish lost stock when factories closed last spring to prevent the spread of new coronaviruses.
Toyota was forced to slow production of the Tundra pickup at a plant in San Antonio, Texas. Ford had scheduled downtime for the next week at its assembly plant in Louisville, Kentucky, but moved to this week. The factory produces small Ford Escape and Lincoln Corsair SUVs.
Fiat Chrysler temporarily closed factories in Brampton, Ontario, and a small SUV plant in Toluca, Mexico, while Volkswagen said in December that it was facing a reduction in production due to the shortage. Nissan said it had to adjust production in Japan, but has not seen a significant impact so far in the U.S.
Industry officials say semiconductor companies shifted production to consumer electronics during the worst of COVID-19’s slowdown in car sales last spring. Global automakers were forced to close factories to prevent the virus from spreading. When automakers recovered, there were not enough chips.
“There have been warning signs about him for months,” said Kristin Dziczek, vice president of industry at the Center for Automotive Research, an industry think tank.
It takes six to nine months for the industry to obtain chips through a complex network of suppliers, said Dziczek. She said she hopes that some of the waiting time has passed when problems started to appear several months ago, making this a short-term rather than a long-term problem. “There are still some coming, but not the volumes they thought there would be,” said Dziczek.
In many cases, automakers have stopped making slower-selling vehicles to divert chips to hotter segments of the market, including pickups and SUVs.
“This will minimize the impact of the current semiconductor shortages, while ensuring that production is maintained at our other plants in North America,” said Fiat Chrysler in a statement.
The auto industry is using more semiconductors than ever in new vehicles with electronic features like Bluetooth connectivity and driver assistance, navigation and hybrid electrical systems. Semiconductors are typically silicon chips that perform memory and control functions in products ranging from computers and cell phones to vehicles and microwave ovens.
Car sales plummeted during the first wave of blockages in April, but have since recovered significant ground. New vehicle sales in the US fell 34% during the first half of last year, but recovered and ended the year with a drop of only 15%.
The scarcity of chips needed in increasingly automated cars is the latest example of how the ebb and flow of the semiconductor industry can have a ripple effect on products.
School districts struggled last summer to fulfill orders for laptops for students who still attended classes remotely, while personal computer manufacturers struggled to protect processors and other components.
The problems started when overseas factories that made the chips were forced to close in the early stages of the pandemic. The problem was compounded last July after the Trump administration imposed sanctions on 11 Chinese companies for alleged labor abuses.
To make matters worse, schools found themselves competing for laptops against companies with more funds that also placed huge orders from employees while working from home.
The chip shortage also forced Apple to postpone the launch of its latest line of iPhones until late October and early November, more than a month after the trend-setting company tends to launch its best-selling device.
The global semiconductor market is expected to be worth about $ 129 billion in 2025, almost three times its size in 2019, according to research firm Mordor Intelligence. The company lists key players in the automotive chip market such as STMicroelectronics, Infineon Technologies, NXP Semiconductor, Texas Instruments and Toshiba.
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Liedtke reported from San Ramon, California.