The slowdown reflects the industry's increasing reliance on the technology provided by semiconductors, including Wi-Fi, Bluetooth, video displays and computerized engines.
Pinching carmakers including Ford, the mismatch between chip supply and demand "could have a significant knock-on effect on jobs and the economy," a Ford Motor Company spokesperson told Fox Business on Friday.
"We are working closely with suppliers to address potential production constraints tied to the global semiconductor shortage and working to prioritize key vehicle lines for production, making the most of our semiconductor allocation," the spokesperson noted.
"A supplier recently informed Toyota about a significant part shortage that will affect semiconductor supply," a spokesperson told FOX Business. "The global supply shortage primarily impacts production of the Tundra, manufactured at our Texas plant, with components also produced in our Alabama, Tennessee and Missouri operations. We do not expect any impact to employment at this time."
|F||FORD MOTOR CO.||16.00||-0.28||-1.72%|
|TM||TOYOTA MOTOR CORP.||172.23||-1.17||-0.67%|
Subaru, which has its U.S. headquarters in Camden, N.J., confirmed to FOX Business that it expects to pare "several thousand” vehicles from production and is reducing output at a plant in Indiana as well as temporarily idling a factory in Japan.
For most, chip shortages were unanticipated during the early days of COVID-19 lockdowns, but so was a surge in demand for cars.
The auto industry rebounded remarkably quickly, resuming normal production.
It was a perfect storm for both industries and, though semiconductor suppliers have been pushed to ramp up production, computer chips are hard to manufacture and their plants can cost tens of billions of dollars to build.
The shortage was compounded by President Trump's trade war with China, which placed restrictions on Semiconductor Manufacturing International Corp. (SMIC) and sent many automakers searching for alternative options.