Global chip shortage badly affects car production

KUALA LUMPUR: The latest automaker to get hit by the shortage of semiconductor chips is none other than General Motors. The US carmaker announced to take down production at four assembly plants by next week.

The automaker will completely stop car production starting Feb 8 at following plants - Mexico, Fairfax, San Luis Potosi, Kansas, Ontario, and Ingersoll. Further, GM's South Korea based Bupyeong 2 factory will run at half capacity.

The automaker did not disclose the chip supplier's name affected by chip shortage nor it revealed the volume it would lose. However, it did say that plants will continue to build highest-profit vehicles which in this case is - SUVs, full-size pickups, and the Corvette sports car. Overall, the automaker wants to cover as much loss as possible.

The list of GM cars affected by the shortage of semiconductor chips include - Malibu sedan, Chevy Trax, Buick Encore, Cadillac XT4, Chevy Trax, and GMC Terrain.

The GM is not alone in the chip shortage issue, as it joins a major group of affected brands including Ford, VW, Toyota, Nissan, Subaru, and Stellantis NV.

Solution? Well only semiconductor chip manufacturers can work towards meeting the supply-demand gap. Speaking of which, the world's largest contract chip maker, Taiwan Semiconductor Manufacturing Co Ltd along with other tech firms are doing their best to resolve the issue.

The Taiwanese chipmakers have pledged to hike the chip production and the government too has urged them to address the issue asap.

You can access the level of impact via following points -

• As per IHS Markit, the shortage of chips could impact 672,000 units of global light vehicle production
• AutoForecast Solutions forecasted an impact of 964,000 vehicles in 2021
• Mazda Motors is considering to cut its global output by 34,000 units in Feb and March
• Nissan Motors suspends truck production due to chip shortage
• Sony is struggling to built enough PlayStation 5 amid the semiconductor shortage

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