Chip shortages hit Toyota production lines • The Register


Toyota is set to cut global motor vehicle production due to semiconductor shortages. The news comes as Samsung pledges to invest around $360 billion over the next five years to bolster chip production, as well as other strategic sectors.

In a statement, Toyota said it had to cut the production schedule by tens of thousands of units worldwide from figures provided to suppliers earlier this year.

“Semiconductor shortages, the spread of COVID-19 and other factors make it difficult to anticipate, but we will continue to do our utmost to deliver as many vehicles to our customers as soon as possible,” the company said. society.

This led to the suspension of manufacturing in May and June for 16 Toyota production lines at 10 plants, out of 28 lines across 14 factories, according to the company.

The news is just the latest in a saga of shortages caused by lockdowns and other issues that have led to long delays in chip shipments affecting multiple industries.

In April, Volvo cited chip shortages for a 22.1% drop in sales of its vehicles in March, compared with the same period a year earlier. Jaguar Land Rover, General Motors and others say they have also felt the pressure this year.

Automakers have been particularly hard hit due to lack of supply chain flexibility, but the effects are also being felt among makers of computers and other kit, with Dell announcing in February that it expects to an increase in the backlog. Chipmaker TSMC warned in April that supply difficulties are expected to last through this year and into 2023.

Amid all this, Samsung announced plans to invest approximately $360 billion in total over five years to drive growth in semiconductors, biopharmaceuticals, and other next-generation technologies.

The investment represents an increase of more than 30% over the previous five-year period and comes with the expectation that it will lead to the creation of 80,000 jobs, mainly in semiconductors and biopharmaceuticals and most of them probably in Samsung’s backyard.

According to Reuters, Samsung said 80% of the investments will be made in South Korea and the announcement includes a £240 trillion ($206 billion) investment pledge made by the company in August 2021.

While this move may be welcomed by many, it is unlikely to alleviate the chip shortage currently felt by many hardware manufacturers and their customers. However, Richard Gordon, Gartner vice president for semiconductors and electronics, said we may now be past the worst.

“We’ve just seen a classic spike in the semiconductor market – chip shortages, price increases, inventory buildup, all of which led to a year of very high growth and record revenues in 2021. But it’s “It’s a cyclical market. The shortage situation is improving; I think we’re past the peak of the cycle,” Gordon told us last month.

“On the supply side, capacity will be phased in from 2022 and supply chain disruption in places like China will lead to sporadic issues in electronics production.”

However, Samsung and TSMC, the world’s two largest contract semiconductor makers, announced earlier this month that they planned to raise the prices they charge customers for making chips. which will likely drive up the prices that businesses and consumers pay for the products.

Earlier this year, Samsung reported fourth-quarter 2021 revenue of $63.8 billion, up 24% year-on-year, with operating profits up nearly 5%, despite the fact that it failed to meet its own forecast for DRAM and NAND shipments in the last three months of the year. ®


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