Three Chinese chip distributors fined for abnormal price increases as prolonged chip shortage raises costs for carmakers
- China’s market regulator fined the chip distributors nearly US$390,000 for price increases above what it considers the normal 7 to 10 per cent
- The global chip shortage has hit China’s automotive industry especially hard, as the country relies on imports for 90 per cent of semiconductor products
China’s market watchdog fined three car chip distributors for driving up prices amid a global semiconductor shortage that has created a supply crunch for carmakers and pushed up costs.
The State Administration of Market Regulation (SAMR) fined Shanghai Cheter, Shanghai Chengsheng Industrial, and Shenzhen Yuchang Technologies a total of 2.5 million yuan (US$387,870), the regulator said in a statement on its website on Friday.
“SAMR will continue to pay close attention to the chip price index, step up our monitoring of prices, and crack down on illegal activities such as hoarding and driving up prices to maintain the sound order of the market,” the regulator said.
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There’s a global semiconductor shortage and this is why it matters
The price hikes far exceeded normal price increases of 7 to 10 per cent for car chip trading companies under balanced supply and demand, the regulator said. It added that the drastic hike led to panic stockpiling among component manufacturers and carmakers, further aggravating the balance of supply and demand, resulting in faster price increases.
Car production in China facing disruptions as chip shortage drags on
The automobile industry in China, the largest in the world for both petrol guzzlers and electric vehicles, has had to bear the brunt of the global shortage, as the country relies on imports for more than 90 per cent of its semiconductor products, according to government data.
Production and sales of passenger cars fell 3.8 per cent and 4.7 per cent, respectively, in June from the previous month, according to SAMR.