US sanctions on China’s largest semiconductor manufacturer could be hurting US companies especially badly amid a global shortage of electronic chips.
General Motors announced on Tuesday it was joining the list of automotive companies that were temporarily slashing production amid a global shortage in semiconductors.
“Despite our mitigation efforts, the semiconductor shortage will impact GM production in 2021,” GM spokesman David Barnas told Reuters. “Semiconductor supply for the global auto industry remains very fluid. Our supply chain organization is working closely with our supply base to find solutions for our suppliers’ semiconductor requirements and to mitigate impacts on GM.”
Citing data from IHS Markit, Automotive News reported Tuesday that the chip shortage would reduce global automobile production by 672,000 vehicles in the first quarter of 2021; data from AutoForecast Solutions indicated the shortage had already resulted in 564,000 less vehicles being made and could reduce production in 2021 by a further 964,000.
Other companies that have reduced production include Toyota, Volkswagen, Honda, Mercedes-Benz, Audi, Subaru, Nissan, Stellantis, and PSA Group, among others.
According to the New York Times, the shortage has been created by a global spike in demand for home electronics as millions of people began working from home during the COVID-19 pandemic, buying computers, tablets, and other devices that require similar semiconductor chips to those used in the computers that govern car functions.
US firms wishing to buy from the partially-state-owned Chinese company must first obtain a special license from the US Department of Commerce. The administration of former US President Donald Trump blacklisted SMIC and several other firms after claiming that doing business with them benefited the People’s Liberation Army, although SMIC has denied any connection to the Chinese military. The firm’s many customers include Qualcomm, Broadcom, and Texas Instruments.
Michael Hogan, a senior vice president at California-based chipmaker GlobalFoundries, told the Times in mid-January that clearing up the shortage could take another six months, adding that “We are doing everything humanly possible to prioritize our output for automotive.”
Sourse: sputniknews.com
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