Tag Archives: global chip shortage

No end to global chip shortage before H1 2023, STMicro CEO says

By Mathieu Rosemain

PARIS (Reuters) -The global chip shortage that is hindering production forecasts of giant companies like Apple Inc and Volkswagen AG is here to stay until the first half of 2023, the chief executive of STMicroelectronics said on Thursday.

“Things will improve in 2022 gradually, but we will return to a normal situation … not before the first half of 2023,” said Jean-Marc Chery in an interview.

By “normal situation,” Chery said he meant regular chip inventory levels and average delays of about three months to replenish components.

The chip shortage, which stems from a boom in demand from a wide range of industries, is stimulating prices, said Chery, who has led the Franco-Italian chipmaker since 2018.

The average price of STMicro’s chips has increased by 5% in 2021 from a year ago, he said, adding that the group expects further price increases in the second-half of 2021 as well as in 2022.

“It’s not like in the past, when everyone was waiting for Microsoft to release a new operating system that would drive demand for many more computers,” Chery said.

“What we have is global shift … with massive orders for components.”

The Geneva-based group will be able to meet only 70% of total customer demand this year, Chery said. That proportion will rise to 85-90% next year as the company invests in production capacity, he added.

Earlier on Thursday, STMicro raised its full-year sales and investment outlook as surging demand from car and phone makers boosted second-quarter profit.

(Reporting by Mathieu Rosemain in Paris; Editing by Peter Graff and Matthew Lewis)

More forced power outages in Taiwan as demand spikes amid heatwave, drought

TAIPEI (Reuters) -Taiwan imposed power cuts on Monday evening following a spike in demand amid a heatwave and drought and failure at a power plant, in the second such outage in a week, although far fewer homes were affected.

Power was restored by 1340 GMT, electricity provider Taipower said.

Taiwan, which major chip makers such as Taiwan Semiconductor Manufacturing Co Ltd (TSMC) call home, already imposed phased blackouts on Thursday following an outage at a plant in the southern city of Kaohsiung.

TSMC, which has factories across the island, said it had seen “no impact so far” from Monday’s power cuts.

Taipower said 660,000 homes were affected by the power cuts, fewer than the roughly 4 million affected last week.

Taipower blamed a rise in demand coincided with the suspension of some generators due to a technical failure at the southern Hsinta Power Plant, the same facility that caused the problem last week.

The state-own company said that the worst drought to hit the island in more than half a century meant electricity generated by hydropower plants was insufficient to meet the unexpected demand on Monday evening, a record high for May.

By 8:40 p.m., only 40% of the supply had been restored in the coal- and gas-fired power plant, Taipower said.

Taiwan’s cabinet offered an apology and urged citizens to stay safe.

Taiwan’s main opposition party, the Kuomintang, said the outages showed the government’s power policy was inadequate and called for Economy Minister Wang Mei-hua to step down.

Taiwan is currently experiencing an unusually hot May with temperatures in parts of the island peaking at around 40 degrees Celsius (104 Fahrenheit).

(Reporting by Yimou Lee and Ben Blanchard; Editing by Gareth Jones, Louise Heavens, Nick Macfie and Raissa Kasolowsky)

Ford outlines further production cuts due to global chip shortage

By Ben Klayman

DETROIT (Reuters) – Ford Motor Co on Wednesday outlined another series of plant shutdowns due to the global semiconductor chip shortage, with five facilities in the United States and one in Turkey affected.

The No. 2 U.S. automaker did not outline how many vehicles would be lost in the latest actions, and reiterated it intends to provide an update of the financial impact of the chip shortage at its quarterly earnings on April 28.

The firm this month announced production cuts at plants in Chicago, Flat Rock, Michigan, and Kansas City, as well as implementing a reduced schedule at its Ohio Assembly Plant, the latest in a string of chip-related curtailments.

Ford said in March it expected the semiconductor shortage to cost between $1 billion and $2.5 billion.

The company said in addition to the chip shortage, other factors driving the shutdowns included the previously reported fire at Renesas Electronics Corp’s chip-making factory in Japan, and prior severe winter storms in Texas.

Industry officials have previously said the shortage would be worse in the second quarter than in the first.

It was not clear if supplies would recover in the third quarter and whether automakers could make up all the lost production later this year.

Many North American automakers cancelled chip orders after plants were shut for two months during the COVID-19 pandemic last year, while demand surged from the consumer electronics industry as people worked from home and played video games.

That has now left carmakers competing for chips.

Semiconductors are used extensively in cars, including to monitor engine performance, manage steering or automatic windows, and in sensors used in parking and entertainment systems.

(Reporting by Ben Klayman in Detroit; Editing by Chris Reese and Jan Harvey)

GM extends vehicle production cuts due to global chip shortage

By Ben Klayman

DETROIT (Reuters) – General Motors Co said on Tuesday it was extending production cuts at three North American plants until at least mid-March due to the global semiconductor chip shortage, while vehicles at two other factories would only be partially built.

GM, whose shares dipped 1.5% after the announcement, did not disclose the impact volumes or say which supplier and vehicle parts were affected by the chip shortage.

But it said it would focus on keeping production running at plants building its highest-profit vehicles: full-size pickup trucks and SUVs. GM said it intended to make up as much lost production as possible once the shortage chip eased.

“Semiconductor supply remains an issue that is facing the entire industry,” GM spokesman David Barnas said. “GM’s plan is to leverage every available semiconductor to build and ship our most popular and in-demand products.”

GM said it was extending downtime at its U.S. plant in Fairfax, Kansas; its Canadian factory in Ingersoll, Ontario; and its Mexican facility in San Luis Petosi until mid-March when it would reassess the situation, he said.

In addition, GM would build but leave incomplete for final assembly vehicles at Wentzville, Missouri, and its Mexican plant at Ramos Arizpe.

GM vehicles affected by the idled plants include the Chevrolet Malibu sedan, Cadillac XT4 SUV, Chevy Equinox, and GMC Terrain SUVs. Vehicles to be left incomplete for now included the Chevy Colorado, GMC Canyon pickups and Chevy Blazer SUV.

This week, GM had said it was idling the three factories where it has now extended downtime and said it would halve production at a plant in South Korea.

The shortage stems from a confluence of factors as auto manufacturers, which shut plants for two months during the COVID-19 pandemic last year, compete against the sprawling consumer electronics industry for chip supplies.

Consumers have stocked up on laptops, gaming consoles and other electronic products during the pandemic, leading to tight chip supplies. They have also bought more cars than industry officials expected last spring, further straining supplies.

The chip shortage has affected many automakers, including Toyota, Volkswagen, Stellantis, Ford Motor Co, Renault, Subaru, Nissan, Honda and Mazda.

Asian chipmakers are rushing to boost production but say the supply gap will take many months to plug. German chipmaker Infineon said the shortage would worsen in the near term. The chip shortage is expected to cut global output in the first quarter by more than 670,000 vehicles and last into the third quarter, IHS Markit said.

AutoForecast Solutions on Tuesday updated its estimate for lost production this year, saying the global industry could lose almost 1.3 million vehicles. GM could lose an estimated 111,450 vehicles, the forecasting firm said.

Honda and Nissan said on Tuesday they would sell 250,000 fewer cars in total this financial year due to the chip shortage.

Ford said last week the shortage was hitting production of its highly profitable F-150 pickup trucks, saying it could lose 10% to 20% of planned first-quarter vehicle production and earnings could fall by $1 billion to $2.5 billion.

Stellantis said it would idle its Canadian minivan plant in Windsor, Ontario, for three weeks until the end of February.

Taiwan, home to the world’s largest contract chip maker, Taiwan Semiconductor Manufacturing Co Ltd (TSMC), is at the center of efforts to resolve the shortage. U.S. officials discussed the issue with their Taiwanese counterparts last week.

Chinese officials said on Tuesday they had met with auto and chip companies, asking them to help ease the shortage. French state officials meet with auto and electronics industry leaders on Wednesday to discuss the issue.

(Reporting by Ben Klayman in Detroit; Editing by Chizu Nomiyama and Jonathan Oatis)