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IFX - Infineon Technologies AG News Story

€31.41 0.1  0.2%

Last Trade - 18/05/21

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

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

Mon 19th April, 2021 1:18pm
(Adds comment from BMW, Nio)
    By Norihiko Shirouzu and Yilei Sun
    SHANGHAI, April 19 (Reuters) - A global shortage of
semiconductors is hitting autos production in China,
jeopardising hopes the world's biggest car market might
spearhead a recovery in the sector, industry executives warn. 
    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 hopes to sell over four million vehicles in the country,
said the situation had not improved in the second quarter. 
    The German group's China chief, Stephan Woellenstein, 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.
    "It is like a perfect storm," BMW's China chief Jochen
Goller said at Shanghai show, adding the shortage had put
pressure on BMW's purchasing. However, he said BMW had not lost
production due to the issue, as it made early orders of chips.
    William Li, chief executive of Nio Inc  NIO.N , told Reuters
on Monday he expected a "relatively big impact" from the chip
shortage on its electric vehicle production in the second
quarter.
    China, where over 25 million vehicles were sold last year,
has been a ray of hope for automakers, including Volkswagen and
General Motors  GM.N , after the global industry was hit hard by
the pandemic.
    But China is also where news of the chip shortage first
emerged last year. The problem 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 have said they have cut production due to the chip
shortage.  
    Li Shaohua, a senior official at the China Association of
Automobile Manufacturers, said the chip supply shortage hit
Chinese auto production by 5% to 8% in the first two months of
this year. It expects the impact to ease from the third quarter.
    As a result, the China Automobile Dealers Association said
it expects car inventories to continue to drop in China, and
that supplies of some models might not be able to meet demand. 

 (Reporting by Norihiko Shirouzu and Yilei Sun
Editing by Alexandra Hudson and Mark Potter)
 ((Y.Sun@thomsonreuters.com; +86 10 66271262; Reuters Messaging:
y.sun.thomsonreuters.com@reuters.net))
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