Chip shortage in China may reduce car production by about 2 million till year end
Published: Oct 15, 2021 04:24 PM
Photo: CFP

Photo: CFP

The shortage of chips may reduce car production by about 2 million units throughout the year in China, Chen Bin, Executive Vice President from China Machinery Industry Federation said on Friday. 

He warned that some products such as industrial sensors, basic industrial software, special raw materials, and precision instrumentation which rely heavily on imports will also be hurt further with "natural calamities and man-made misfortune." 

His comments came at the ongoing China Auto Supply Chain Conference held in Chongqing Municipality. 

From May to September this year, China's automobile production and sales fell for five consecutive months. Based on this speculation, the shortage of chips may reduce production by about 2 million units throughout the year, he said.  

"A single chip can affect the production and sales of millions of cars a year, and such fragility is a concentrated reflection of the ecological fragility of China's manufacturing supply chain," he added. 

The impact of the shortage of "chips" has also extended to many fields in China's manufacturing industries such as mobile phones, machine tools, home appliances, and notebook computers.

Although it has been relieved to a certain extent, in general, the auto chip supply chain will remain tight for some time, and the current problem is still quite serious, Tian Yulong, spokesman for the Ministry of Industry and Information Technology said at a press conference in September. 

Tian said the global outbreak making companies slow down their capacity expansion plan and the repeated epidemic causing some countries and regions to shut down some chip production line are the main reasons behind the shortage. 

Data from the China Association of Automotive Manufacturers showed that China's car sales in September fell for the fifth consecutive month year-on-year, brought by factors such as the shortage of chips. In September, China's auto sales reached 2.067 million units, a year-on-year decrease of 19.6 percent.

Global Times