A shortage of semiconductors continues to hit global carmakers, the Daily reported

Japanese media said the semiconductor shortage caused the world's major car manufacturers have cut production. That's because the epidemic has led to a surge in demand for semiconductors used in personal computers and smartphones. The situation is expected to continue for months, hampering not only the industry's ability to resume production but also its potential impact on corporate earnings.

After this week, Honda will cut production of five of its flagship models, including the Accord, at five plants in the United States and Canada. Suzuka, based in Mie prefecture, this month cut its planned production of the Fit by 4,000 units. The reason for the above measures is that the shortage of semiconductors for vehicles has prevented manufacturers from carrying out production activities.

Toyota has also suspended some production lines at its Chinese plant and will reduce production of minivans at its Texas plant. In addition, Nissan and Subaru will adjust production plans for the Note at the Chomahama plant and Gunma Manufacturing, respectively.

It was reported that among European and American auto manufacturers, Volkswagen announced that it would implement a production reduction plan in the first quarter of this year in the US and Europe with a total scale of up to 100,000 units, which is equivalent to 1% of its global sales volume (about 10.97 million units) in 2019. Fiat Chrysler (FCA), Ford of the US, Daimler of Germany and Renault of France are also cutting production or will soon do so.

It is reported that semiconductors can control current and voltage, and can be used to produce a variety of products and components, known as the "rice of industry". Each fuel vehicle needs to install an average of 30 semiconductor parts, steering power, air conditioning, air bags, navigation, window control and other systems can be seen in their presence. As many as 80 semiconductors are needed for electric and advanced cars with more complex circuitry systems.

The report noted that the rapid change in demand for cars has led to a growing shortage of semiconductors.

According to the International Organization of Automobile Manufacturers, from January to June 2020, the world's total automobile production was about 31 million vehicles, down about 30 percent year on year due to the spread of the epidemic. Production began to pick up after the summer, but semiconductor companies focused more on semiconductors for personal computers and smartphones, which have boosted demand due to travel restrictions, than on semiconductors for cars, leading to shortages.

According to the World Semiconductor Trade Statistics Association, the global semiconductor market is estimated to be worth $412.3 billion in sales in 2019, but automotive semiconductor sales account for only about 10 percent of that. If demand for semiconductors for personal computers and mobile phones, which account for most of them, increases, it is easy to squeeze the production of semiconductors for cars.

In addition, a fire at the factory of Asahi's semiconductor subsidiary in Yeongang City in October 2020 dealt a huge blow to the industry.

Several Japanese auto makers said that could affect parts supplies beyond March. Kazuhiro Sugiyama of Omdia, a U.K. research firm, believes the semiconductor shortage will cause a series of component shortages that will last for about six months.

Demand for electric vehicles is high in Europe, where environmental policies are stricter, but the high number of semiconductor components installed could further exacerbate the current supply crisis, the report said.