GM joins the crowd of automakers cutting production over chip shortage
DETROIT — General Motors became the latest automaker hit by the global shortage of semiconductor chips as the U.S. automaker said on Wednesday it will take down production next week at four assembly plants.
GM said it will cut production entirely during the week of Feb. 8 at plants in Fairfax, Kansas; Ingersoll, Ontario; and San Luis Potosi, Mexico. It will also run its Bupyeong 2 plant in South Korea at half capacity that week.
GM did not disclose how much volume it would lose or which supplier was affected by the chip shortage, but said the focus has been on keeping production running at plants building the highest-profit vehicles — full-size pickup trucks and SUVs as well as the Chevrolet Corvette sports car. GM said it intends to make up as much lost production as possible.
AutoForecast Solutions, which tracks production, estimated GM’s combined lost volume would total almost 10,000 vehicles next week.
“Despite our mitigation efforts, the semiconductor shortage will impact GM production in 2021,” GM spokesman David Barnas told Reuters in a statement.
“Semiconductor supply for the global auto industry remains very fluid,” he added. “Our supply chain organization is working closely with our supply base to find solutions for our suppliers’ semiconductor requirements and to mitigate impacts on GM.”
Affected GM vehicles include the Chevrolet Malibu sedan, Cadillac XT4 SUV, Chevy Equinox and Trax, and GMC Terrain SUVs and the Buick Encore small crossover vehicle.
The chip shortage has led several automakers, including Volkswagen AG, Ford Motor Co, Subaru Corp, Toyota Motor Corp, Nissan Motor Co and Stellantis NV, to cut vehicle production.
Taiwan, home to the world’s largest contract chip maker, Taiwan Semiconductor Manufacturing Co Ltd (TSMC) and other major tech firms, is at the center of efforts to resolve the shortage.
Taiwanese chipmakers have promised to increase production and the government has urged them to address the problem.
Taiwan economic officials will hold a virtual meeting with the United States at the end of this week to discuss supply chains, with semiconductor firms present.
On Tuesday, 15 U.S. senators, including some from key automotive states like Michigan, Ohio, Tennessee, Illinois, Indiana and South Carolina, urged the White House to work with Congress to address the chip shortage.
Production cuts could affect nearly 1 million vehicles
A shortage of auto chips could impact 672,000 units of global light vehicle production in the first quarter, data firm IHS Markit said on Wednesday, warning that the disruption could extend into the third quarter.
The shortage has impacted Volkswagen, Ford Motor Co, Subaru Corp, Toyota Motor Corp, Nissan Motor Co Ltd, Fiat Chrysler Automobiles and other car makers.
“Because the cause of these constraints is the result of increasing demand from OEMs and limited supply of semiconductors, it will not be resolved until both forces are aligned,” said Phil Amsrud, senior principal analyst-ADAS, Semiconductors and Components, IHS Markit.
China will be the most hit in the first quarter at nearly 250,000 units, according to IHS. The semiconductor shortage in some cases has been exacerbated by the former Trump administration’s actions against chip factories in China, but a factory fire and skyrocketing demand for all kinds of applications are also to blame.
AutoForecast Solutions, which tracks industry production plans, on Tuesday forecast production volume impact of 964,000 vehicles in 2021 due to semiconductor shortage.
In 2019, automotive groups accounted for roughly a tenth of the $429 billion semiconductor market, according to McKinsey.
Mazda could cut production by 34,000 vehicles
TOKYO — Mazda Motor Corp is considering cutting its global output by a 34,000 vehicles in February and March due to a chip shortage, two sources familiar with the matter said on Wednesday.
Last week, Mazda was considering cutting output of models that include its CX-5 and CX-30 SUVs, as well as the Mazda 3 sedan, due to a shortage in supplies of chips used for brake systems and safety components, said the sources, who declined to be identified.
The company plans to reduce its domestic output of the CX-5 by around 3,900 vehicles this month, they said. As of last week, it was considering reducing production of the SUV by about 6,000 vehicles in March, the sources said.
Mazda is also considering an output cut in Japan, China and Mexico for the Mazda 3 and the CX-30 models, the sources told Reuters.
A Mazda spokesman confirmed the company expected to see an impact on its output in February, without elaborating on the size of any reduction.
“We are expecting a (global) impact on our output in February,” a Mazda spokesman said. “We continue to do our best to minimize the impact.”
He did not specify how many fewer cars will be made, adding the situation changes on a daily basis as the company continues to make adjustments with its suppliers.
Mazda will drop its production pace and is not planning to halt the lines at its plants, he said.
Nissan halts some truck production in Mississippi
Nissan Motor has suspended some truck production in Mississippi due to the shortage of chips, a Nissan USA spokeswoman said.
The Japanese automaker has had to make short-term production adjustments at its North American operations due to the shortage, beginning with three non-production days on the truck line at its Canton, Mississippi, facility, she said.
Auto-state senators urge White House to deal with chip shortage
WASHINGTON — A group of 15 U.S. senators on Tuesday including Majority Leader Chuck Schumer and Republican John Cornyn urged the White House to work with Congress to address the global semiconductor shortage that is hampering auto manufacturing.
The senators, from key auto states like Michigan, Ohio, Tennessee, Wisconsin, Illinois, Indiana and South Carolina, in a letter to the White House warned the “shortage threatens our post-pandemic economic recovery.”
“We believe that the incoming administration can continue to play a helpful role in alleviating the worst impacts of the shortage on American workers,” the senators wrote.
The senators, including auto caucus chairs Democrat Sherrod Brown and Republican Rob Portman, urged the White House “to support efforts to secure the necessary funding to swiftly implement the semiconductor-related provisions in the most recent National Defense Authorization Act, which would boost the production of semiconductor manufacturing and incent the domestic production of semiconductors in the future.”
Matt Blunt, who heads the American Automotive Policy Council representing U.S. automakers, praised the senators “who recognize it is a significant challenge for the auto sector.”
The White House did not immediately comment.
Sony PlayStation 5 production hit by chip shortage
TOKYO — Japan’s Sony Corp raised its full-year profit outlook by one-third, helped by pandemic-fuelled demand for games, movies and other content, but said it was struggling to build enough PlayStation 5 consoles amid a global shortage of semiconductors.
The electronics and entertainment conglomerate said on Wednesday some customers may have to wait longer for their consoles as it competes for chips with other businesses ranging from smartphone makers to car companies.
“It is difficult for us to increase production of the PS5 amid the shortage of semiconductors and other components,” Chief Financial Officer Hiroki Totoki said at a press briefing.
Sony expects to sell more than 7.6 million PS5 consoles by end-March, he added.
PS5, which sells for as much as $500, quickly sold out after its launch on online retail sites in the United States and Japan in November, thanks to demand for videogames from people stuck at home due to coronavirus lockdowns.