China’s resurgent carmakers accelerate out of coronavirus crisis … straight into semiconductor components speed bump
- A wide range of companies might have to cut or even halt production because of a chips delivery bottleneck
- Situation is critical, as demand has risen due to the full-speed recovery of the Chinese market, Volkswagen says
Chinese carmakers have fallen victims to the coronavirus pandemic despite months of strong sales – they are facing a shortage of chips that are used in manufacturing as well as automobiles’ electronic systems.
Lockdowns in Europe have disrupted the production of chips, a key component that China-based carmakers and car part suppliers need to maintain operations, according to three industry officials.
But the sector is now feeling the pinch, as a wide range of companies might have to cut or even halt production in the coming months, because of a semiconductor components delivery bottleneck, said Peter Chen, an engineer with car parts maker TRW.
“The strong rebound in China’s automotive market ushered in a surge in orders for chips during this year’s second half. But the chip companies, mainly in Europe, have been unable to churn out enough products to meet this demand,” he said.
Global powerhouses that have joint ventures in China, such as chip makers Continental and Bosch and German carmaker Volkswagen, said recently that a short supply of chips could last into 2021 and that this could lead to price hikes.
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