Toyota Halts Production In China Due To Global Semiconductor Shortage

Toyota Halts Production In China Due To Global Semiconductor Shortage 

BY TYLER DURDEN TUESDAY, JAN 12, 2021 - 18:25

An ongoing global chip shortage has finally started to wreak havoc with the auto industry, which has become far more reliant on semiconductors due to "smart cars", than it ever has been.

On Tuesday, it was reported that Toyota has stopped its factory lines in Guangzhou, China as a result of lack of semiconductors. This comes just hours after the company said it would have to cut production of its Tundra, being manufactured in Texas, by 40% for the same reason.

"The [Chinese factory] suspension could result in as much as a 30% cut in January’s output depending on how long it drags on," Bloomberg noted early Tuesday morning. The company has told some of its suppliers that the halt could last about 4 days. 

Meanwhile, Toyota was unable to provide concrete information as to when production would restart. The Japanese automaker operates the Guangzhou factory with Guangzhou Automobile.

Toyota spokesman Scott Vazin told the Chicago Tribune last week: “This is absolutely an industry issue. We are evaluating the supply constraint of semiconductors and developing countermeasures to minimize the impact to production.”

Kristin Dziczek, vice president of industry at the Center for Automotive Research, commented: “There have been warning signs about his for months.”

Just days ago Nikkei had reported that the global chip shortage was already causing a reduction in some production:

The auto industry is facing a severe lack of semiconductors amid rising use of the chips in other products, like smartphones and communication base stations.

This has forced Germany's Volkswagen as well as Japanese makers like Honda and Nissan to reduce production.

Jalopnik also highlighted other shutdowns that have taken place as a result of the chip shortage, noting on Monday: "Ford is temporarily shutting down its Louisville plant this week, where the Escape and Lincoln Corsair are built. Nissan is reducing production at its Oppama, Japan, factory, where it manufactures the Note. Fiat Chrysler is pausing activity at its Brampton, Ontario, and Toluca, Mexico, plants, affecting the Jeep Compass, Chrysler 300 and Dodge Charger and Challenger, while Toyota is limiting Tundra production at its San Antonio factory."

GM said at the time it was also "closely monitoring" the situation. The lead time for chips to make their way to the auto industry is about 6 to 9 months.  

https://www.zerohedge.com/markets/toyota-halts-production-china-due-global-semiconductor-shortage

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