Japanese media: Insufficient semiconductor supply, many global car companies reduce production

According to Japanese media observations, the lack of semiconductor supply has caused global electric vehicle production to be in chaos.

According to a recent report by the “Nihon Keizai Shimbun”, semiconductors, which are essential for automobile production, are facing a growing shortage of supply. Semiconductors are an indispensable component in the process of automobile electrification, but due to the need to meet the large demand for semiconductors in the smartphone industry, the semiconductor production industry has no stock to be converted to the automotive industry.

After Volkswagen of Germany and Honda of Japan, Nissan has also decided to reduce production, and Toyota Motor Corp. has not been able to determine its production plan for 2021. It can be said that the impact of insufficient semiconductor supply has spread to the world.

Volkswagen Group has already announced that it will adjust production in China, North America and Europe, citing a lack of semiconductor supplies. In Germany, production of the main model “Golf” will be discontinued between December 2020 and mid-January 2021. Volkswagen Group’s Seat will implement production cuts in Spain from late January to April. Honda has also decided to adjust its production plan. The production of small cars produced by Suzuka Works will be reduced by about 4,000 units in January.

According to the report, the reason for the reduction of production by car companies is mainly due to the delay in the supply of parts with semiconductors by parts production giants such as Germany’s Bosch AG and Continental Group. The semiconductors were sourced from NXP Semiconductors in the Netherlands and STMicroelectronics in Switzerland, but it appears that some semiconductors have been delayed.

With the popularity of pure electric vehicles and autonomous driving technology, the importance of on-board semiconductors has further increased. According to KPMG Japan, the average number of semiconductors used in each pure electric vehicle is 2 times more than that of gasoline vehicles. Automakers are now in need of large quantities of semiconductors due to the sharp increase in demand after the new crown epidemic. However, semiconductor purchases for computers and smartphones are also growing due to the demands brought about by living at home. The semiconductor industry has received a large number of orders for semiconductors of different specifications in many industries, and it seems that it is somewhat powerless.

According to the report, a major reason for the sluggish semiconductor supply is that the semiconductor industry is promoting the so-called “horizontal division of labor”, that is, the separation of R&D and production. Semiconductor companies often do not produce their own companies, but place orders from semiconductor foundry manufacturers. In order to produce a variety of semiconductors, it takes time to adjust equipment, etc., so it is difficult for foundries to manufacture different semiconductors at the same time. It may take half a year for some car companies to obtain the normal supply of semiconductors.

The report pointed out that most car production was halted in the first half of 2020 due to the new crown epidemic. Another reason is that the auto industry cannot compete with high-tech industries such as smartphones and mobile base stations that have expanded their business during this period. Semiconductors, which are increasingly important in automotive upgrades, are facing production bottlenecks, which can be said to be a new issue encountered by the industry.

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