Asian chipmakers are rushing to expand their production capacity to meet a global shortage that has been acutely felt by carmakers, but the firms have warned that the supply gap may take many months to plug as they struggle to keep up with strong demand.
Automakers from General Motors to Stellantis and Honda Motor are shutting assembly lines due to the shortages, which in some cases have been exacerbated by the former US administration’s sanctions against Chinese chip factories, Reuters disclosed.
Some firms have also furloughed staff. Eight-inch chip manufacturing plants owned mostly by Asian firms, which tend to make older, less sophisticated chips, are particularly under strain primarily due to under-investment in recent years. The majority of such factories are used to make auto chips.
Consumer demand in China, especially for cars, has snapped back unexpectedly quickly from the coronavirus crisis, and orders for products such as laptops and mobile phones in regions still struggling with pandemic restrictions, such as Europe and the United States, have also picked up.
The global concerns about the chip shortage were underscored at recent quarterly earnings calls held by companies from Taiwan Semiconductor Manufacturing Co. Ltd (TSMC) to South Korea’s SK Hynix.
“We are under great pressure now,”co-CEO of China’s top chipmaker Semiconductor Manufacturing International Corp, Zhao Haijun, which last week announced plans to expand capacity by 45,000 wafers per month at its 8-inch fabrication plant this year.
However, the company cautioned that the capacity boost would not occur quickly due to longer lead times for equipment procurement, as it grapples with supply chain disruptions caused by sanctions imposed by the former Trump administration.
