Volvo: Chip supply shortage, will suspend or adjust production in China and the United States in March

WASHINGTON, March 19 (Reuters) – Volvo Cars said on Wednesday it would suspend or adjust production at some of its auto plants in China and the U.S. in March due to a shortage of chips.

Since the second half of 2020, the problem of chip shortages has become the main theme of the semiconductor industry. Today, the chip shortage problem is getting worse, and industries including automobiles, mobile phones, game consoles, and PCs have been affected one after another.

Last month, Volvo Cars CEO Hakan Samuelsson said that Volvo’s chip supply for the next four weeks has been guaranteed, and the shortage of chips in the auto industry has not yet hit the company, but it may pose a huge risk to the company’s first-quarter results.

A global chip shortage has hit automakers around the world. A variety of factors have contributed to the supply shortage, including the need for automakers to compete with the consumer electronics industry for chip supplies.

More people are working and studying from home during the Covid-19 pandemic, leading to increased demand for chips used in smartphones and computers. As chipmakers focus on meeting this demand, semiconductor supply to auto parts makers has stalled.

Currently, the global chip shortage has largely affected the auto industry, forcing several automakers to stop production. Recently, for example, General Motors announced the temporary closure of its Lansing, Michigan plant, which makes the Chevrolet Camaro and the Cadillac CT4 and CT5, due to a shortage of chips, and is not expected to reopen until April this year.

Most of Honda’s U.S. and Canadian auto plants will shut down for a week next week due to the coronavirus outbreak, chip shortages and supply chain problems caused by bad weather.

In addition, Ford said it will slash production of its best-selling F-150 truck due to a semiconductor shortage.

Just recently, car companies including SAIC and Great Wall have announced in-depth cooperation with domestic chip companies to plan ahead. At this year’s “two sessions”, a number of deputies to the National People’s Congress or members of the Chinese People’s Political Consultative Conference also discussed the problems exposed by the shortage of chips, and it is inevitable to “strengthen the core chain”.

As for when the chip shortage in the global automotive market will improve, Guotai Junan said that the shortage of automotive chips will have an impact on global automobile production and sales in the first half of 2021, and the impact will be greater in the second quarter. However, the supply side will gradually improve due to price increases and competition between giants, and it is expected that the shortage of automotive chips will be gradually eliminated in the third quarter.