China investigates chip hoarding as carmakers continue to struggle amid global semiconductor shortage
- The State Administration for Market Regulation says it is investigating component distributors for hoarding car chips to drive up prices amid a global shortage
- Booming global demand has left chip foundries unable to keep up, and increasing capacity can take several months or even a year to do
The State Administration for Market Regulation (SAMR) made the announcement on Tuesday, saying it would continue to pay close attention to the market price of important commodities, including chips, and severely punish illegal actions such as hoarding and market coordination designed to increase prices.
The SAMR did not name the distributors under investigation.
“Hoarding by some distributors for profit did contribute to the severity of the current car chip crunch, but the biggest reason remains tight production capacity,” said Xie Ruifeng, a senior analyst with Shanghai-based semiconductor research firm ICWise.
There’s a global semiconductor chip shortage and this is why it matters
To keep up with demand, foundries are maximising capacity and seeking to increase it as some economies start to emerge from pandemic-induced slumps, raising consumer demand for all types of products. However, increasing capacity at a chip plant can take six months to a year, and the lead time has also increased amid high demand for chip-making equipment.