DETROIT (AP) – A growing global shortage of semiconductors for auto parts is forcing major auto companies to shut down or slow down vehicle production just as they were recovering from pandemic-related factory shutdowns.
Officials at Volkswagen, Ford, Fiat Chrysler, Toyota and Nissan all say they have been hit by the shortage and have been forced to delay production of some models to keep other factories running.
“This is definitely an industry problem,” Toyota spokesman Scott Vazin said in an email Friday. “We are evaluating semiconductor supply constraints and developing countermeasures to minimize the impact on manufacturing.”
If the shortage of chips persists, production cuts could reduce the inventory of cars, trucks and SUVs for sale in the US and other markets. That comes at a time when the industry was just beginning to replenish supplies that were lost when factories closed last spring to stop the spread of the new coronavirus.
Toyota was forced to slow production of the full-size Tundra pickup truck at a factory in San Antonio, Texas. Ford had planned a shutdown at its assembly plant in Louisville, Kentucky next week, but moved it to this week. The factory makes the Ford Escape and Lincoln Corsair small SUVs.
Fiat Chrysler has temporarily closed car factories in Brampton, Ontario, and a small SUV factory in Toluca, Mexico, while Volkswagen said it was facing production delays in December due to the shortage. Nissan said it has had to adjust production in Japan, but has not seen a significant impact in the US so far.
Industry officials say semiconductor companies shifted manufacturing to consumer electronics during the worst slowdown in COVID-19 car sales last spring. Global car manufacturers were forced to shut down plants to prevent the spread of the virus. When automakers recovered, there weren’t 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 the industry six to nine months of turnaround time to get chips through a complex network of suppliers, Dziczek said. She said she hopes some of the turnaround time has passed when the issues surfaced several months ago, making this a short-term problem rather than a long-term one. “There are still some coming through, just not the volumes they thought they would be,” Dziczek said.
In many cases, automakers have stopped making slower vehicles to move the chips to warmer segments of the market, including pickups and SUVs.
“This will minimize the impact of the current semiconductor shortage and ensure that we maintain production in our other North American plants,” Fiat Chrysler said in a statement.
The automotive industry is using more semiconductors than ever before in new vehicles with electronic functions such as Bluetooth connectivity and driver assistance systems, navigation and hybrid electrical systems. Semiconductors are typically silicon chips that perform control and memory functions in products ranging from computers and cell phones to vehicles and microwave ovens.
Car sales plummeted during the first wave of lockdowns in April, but have since recovered significant ground. New vehicle sales in the US fell 34% during the first half of last year, but rebounded and ended the year at just 15%.
The shortage of chips needed in more and more automated cars is the latest example of how the ebb and flow in the semiconductor industry can have ripple effects in products.
School districts tried to get orders for laptops last summer for students who were still largely attending classes remotely, as PC makers struggled to secure processors and other components.
Trouble started when overseas factories making the chips were forced to close in the early stages of the pandemic. The problem was exacerbated last July after the Trump administration imposed sanctions on 11 Chinese companies for alleged labor abuse.
To make matters worse, the schools competed for laptops against larger-bag companies that also placed huge orders for employees while working from home.
Chip shortages also forced Apple to delay the rollout of its latest line of iPhones until late October and early November, more than a month later than when the trendsetting company usually releases its best-selling device.
The global semiconductor market is expected to be worth about $ 129 billion by 2025, nearly three times that in 2019, according to research firm Mordor Intelligence. The company names major players in the automotive chip market such as STMicroelectronics, Infineon Technologies, NXP Semiconductor, Texas Instruments and Toshiba.
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Lofte reported from San Ramon, California.