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IFX - Infineon Technologies AG News Story

€31.41 0.1  0.2%

Last Trade - 18/05/21

Large Cap
Market Cap £35.07bn
Enterprise Value £38.27bn
Revenue £8.59bn
Position in Universe 37th / 1054

AUTOSHOW-Chip shortage casts shadow on China's auto industry recovery

Sun 18th April, 2021 11:00pm
By Norihiko Shirouzu and Yilei Sun
    SHANGHAI, April 19 (Reuters) - Auto industry executives are
rattled by a global shortage of semiconductors which is hitting
production in China, after hoping the world's biggest car market
could spearhead global recovery in the sector.
    Automakers around the world have had to adjust assembly
lines due to the shortages, caused by manufacturing delays that
some semiconductor makers blame on a faster-than expected
recovery from the coronavirus pandemic.
    Volkswagen AG  VOWG_p.DE , China's biggest foreign automaker
which wants to sell over four million vehicles in the country,
said the impact of the shortage remains unabated in the second
quarter this year.
    Stephan Woellenstein, Volkswagen's China chief, told
reporters on Sunday it was hard to gauge how much production
Volkswagen might lose week to week or even month to month
because of the chip shortage. 
    "It's really like fire-fighting... In some cases, we have
switched to another chip so we changed suppliers," he said,
ahead of the Shanghai auto show which opens on Monday. 
    China, where over 25 million vehicles were sold last year,
become a ray of hope for automakers, including Volkswagen and
General Motors  GM.N , as the global auto industry was hit hard
by the pandemic.
    However, China is also where news of the auto chip shortage
first emerged last year. The shortage was worsened by a fire in
Renesas Electronics'  6723.T  chip factory in Japan in March.
    In 2019, automotive groups accounted for roughly a tenth of
the $429 billion semiconductor market, according to McKinsey,
with NXP Semiconductor  NXPI.O , Germany's Infineon  IFXGn.DE  
and Renesas among key suppliers to the sector.
    Automakers, including Nissan Motor  7201.T , Ford Motor
 F.N  and Nio Inc  NIO.N  said they cut production due to the
chip supply shortage.  
    Li Shaohua, senior official at China Association of
Automobile Manufacturers, said chip supply shortage hit auto
production by 5% to 8% in the first two months this year and
expects the impact to ease from the third quarter of this year.
    As a result, China Automobile Dealers Association, said it
expects car inventory to continue to drop in China as the chip
shortage hits overall auto production. Supply of some car models
might not be able to meet demand, it said. 

 (Reporting by Norihiko Shirouzu and Yilei Sun
Editing by Alexandra Hudson)
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