According to FT reports, German automakers have sought help from the government to alleviate the serious shortage of semiconductors. A semiconductor shortage could paralyze German production.
At the end of last year, the global automobile demand recovered beyond that, leading to a sudden increase in demand for key chips, and semiconductor manufacturers were unable to satisfy the automotive industry in the face of strong demand for consumer electronics.
The German auto industry hopes that government intervention may help auto suppliers increase their priority in the chip supply chain, especially in Asia. However, industry insiders said that the current priority of automakers is not high, and technology giants such as Samsung and Huawei occupy a priority position. Volkswagen, the world's largest automaker, has been forced to let tens of thousands of employees take vacations. Volkswagen said it will reduce production by at least 100,000 vehicles in the first few months of this year. Daimler also had to cut production, and Ford had closed its factory in Saar Louis until mid-February.
The German automotive lobby VDA said in a statement that the world is vigorously improving the supply of semiconductors in the automotive industry, and the organization is in contact with the German government.
The VDA's move came after its American counterparts sought assistance from the Biden administration. On the other hand, the Japan Automobile Manufacturers Association also discussed with government officials. The German Ministry of Commerce stated that it is monitoring the format very closely and keeping in touch with companies that are more affected. In the medium term, it is very important and critical to expand semiconductor production capacity in Germany and Europe. The German Ministry of Commerce is funding 18 companies to build chip factories in Germany.
Analysts said the semiconductor supply bottleneck may last for several weeks, and it will take 3 to 6 months to increase production. According to a report by Frank Beer, an investment analyst at LBBW Bank, global auto production will be reduced by up to 2.2 million vehicles this year.
People familiar with the matter revealed that if it were not for the shortage of semiconductor supply, Volkswagen would have hired more employees to meet demand, but Volkswagen said it expects to make up for the production loss in the second half of the year.