US government officials say they are starting to see signs of relief for the global semiconductor supply shortage, including commitments from manufacturers to make more chips for automakers that have had to idle production.
US Secretary of Commerce Gina Raimondo, who has led US President Joe Biden’s efforts on chip supply, has brokered a series of meetings between semiconductor manufacturers, their suppliers and their customers, including automakers.
Senior officials said the meetings helped ease mistrust between the sides related to chipmakers’ production and allocation, and automakers’ orders.
The result has been more transparency about the manufacturers’ production and shipments, and a gradual increase in supply for automakers, Raimondo said in an interview.
Washington has also pressed the governments in Malaysia and Vietnam to ensure semiconductor plants would be deemed “critical” businesses and maintain some production following COVID-19 outbreaks, officials said.
“You’re starting to see some improvements,” Raimondo said, adding that Ford Motor Co chief executive Jim Farley and General Motors Co chief executive Mary Barra have told her that “they’re starting to get a little bit more of what they need” and the situation is “a little bit better.”
A Goldman Sachs analysis published last month said that the peak impact of the chip shortage was in the second quarter and auto production “should jump in July.”
However, US automakers continue to struggle with the shortage, which is estimated to be taking a US$110 billion toll on the industry.
Ford is closing or curtailing production at eight factories this month, including the plant manufacturing its new version of the iconic Bronco sport utility vehicle (SUV). Five of General Motors’ North American plants are to experience “downtime” due to “semiconductor production adjustments” this month and next month, company spokesman David Barnas said.
Meanwhile, tens of thousands of new vehicles remain sitting in lots outside US factories waiting for the chips that power their onboard computers.
General Motors’ “global purchasing and supply chain, engineering and manufacturing teams continue to find creative solutions and make strides working with the supply base to maximize production of our highest-demand and capacity-constrained vehicles, including full-size trucks and SUVs for our customers,” a company statement said.
The semiconductor shortage predated the Biden administration, but emerged as a crisis for the new president earlier this year, when US automakers were forced to begin curtailing production due to a lack of chips.
Manufacturing of semiconductors is concentrated with a pair of Asian companies, Taiwan Semiconductor Manufacturing Co (台積電) and Samsung Electronics Co Ltd.
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