A global shortage of semiconductors have forced automakers around the world to shut assembly lines. In some cases the reason behind the shortage has been exacerbated by the Trump administration’s actions against key Chinese chip factories, industry officials said.
Leading automakers such as Ford Motor Co, Subaru Corp and Toyota Motor Corp are curbing the production as the shortage caught them off-guard and is likely to continue for many months.
Automakers affected in other markets include Volkswagen, Nissan Motor Co Ltd and Fiat Chrysler Automobiles.
The problems rise from a number of factors, as auto manufacturers compete against the sprawling consumer electronics industry for chip supplies. Consumers have stocked up on laptops, gaming consoles and other electronic products during the pandemic, creating tight chip supplies throughout 2020.
Adding to the strain was the fact that consumers bought more cars than industry officials expected last spring.
In at least one case, the shortage can be traced to President Donald Trump’s policies aimed at curbing technology transfers to China.
One automaker moved chip production from China’s Semiconductor Manufacturing International, or SMIC, which was hit with U.S. government restrictions in December, to Taiwan Semiconductor Manufacturing Co in Taiwan, which in turn was overbooked, a source stated.
“The systemic aspect of the crisis is giving us a headache,” said a supplier executive, who asked not to be identified. “In some cases, we find substitution parts that could make us independent from TSMC, only to discover that the alternative wafer manufacturer has no capacity available.”
TSMC Chief Executive C.C. Wei during a call with investors, said there was a shortage of automotive chips made with “mature technology” and that it is working with customers “to mitigate the shortage impact.”
A Ford plant in Kentucky that makes the Escape sport utility vehicle slowed down production because of the shortage of a chip in the vehicle’s brake system, a union official in the plant said.
The situation is unlikely to improve quickly, since all chips, whether bound for a laptop or a Lexus, start life as a silicon wafer that takes about 90 days to process into a chip.
The chipmaking industry has always strained to keep up with sudden demand spikes. The factories that produce wafers cost tens of billions of dollars to build, and expanding their capacity can take up to a year for testing and qualifying complex tools.
“The long and short of it is, demand is up about 50%. And there’s no asset-intensive industry like ours that has 50% capacity lying around,” said Mike Hogan, senior vice president at chip manufacturer GlobalFoundries and head of its automotive unit.