Trump administration’s actions against key Chinese chip factories have dealt a blow to automakers who now face a shortage of semiconductors, according to Reuters. Major automakers have been forced to curtail production in the U.S, with the shortage expected to continue for as long as six months.
- Despite the tech war impacts, automakers also compete with the sprawling consumer electronics industry for chip supplies
- Consumers have also bought more cars than industry officials expected last spring, straining chip supplies.
- Automakers have been forced to find substitutions parts but alternative wafer manufacturers have run out of capacity.
- The shortage situation is unlikely to improve quickly since all chips start life as a silicon wafer that takes about 90 days to process into a chip.
- “There’s a fear of using a Chinese chip factory if the United States is going to put them on an entity list”-Daniel Goehl, chief business officer at UltraSense Systems
- Automaker executives and suppliers are adapting production schedules to protect chips used in higher-profit vehicles.
- Companies are also weighing sourcing chips from more suppliers and increasing inventory levels in the future.
Major automobile stocks are currently mixed. F: NYSE is down 1.28% on premarket, GM: NYSE is up 1.49%, 7203: TYO is down 1.65%, VOW3: ETR is up 0.88%, 7270: TYO is down 2.11%
