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  • now a shortage of silicon chips is forcing automakers to cut back on production.

  • US.

  • Car giant Ford is now drastically reducing output of its top selling F 1 50 pickup truck, while General Motors says it will suspend work at three North American factories.

  • The to U.

  • S carmakers are the latest to react to what has become a global problem.

  • Germany's Daimler, BMW and Volkswagen, as well as Toyota and many other car manufacturers, said that they will halt production at their factors due to the chip shortage Now.

  • This comes just as they began recovering from pandemic forced plant shutdowns.

  • Yes, now these semiconductor chips they power everything from planes to cars to computers and silicon waivers are a key component of the market for these waivers.

  • Making them has been now by dominated up until now by five companies.

  • Still, tronic of Germany is one of them and global waivers of Japan as well.

  • But now those two companies are joining forces.

  • Global waivers says it's €4.4 billion bid for a controlling stake, and electronics has been successful.

  • Combined, they will become the world's second biggest silicon wave producer at a time when need for the product has never been higher, Semiconductors are in demand and money is cheap.

  • Tech heavyweights have taken note and are on a shopping spree with their sights set on Europe's relatively small and affordable companies.

  • After all, Europe is a huge market that's set to grow rapidly.

  • That's why two companies changed ownership this week.

  • German microchip maker Dialogue now has Japanese owners, while silicon wafer producers electronics was snapped up by a Taiwanese firm.

  • British based chip designer RM is also the target of a takeover bid and video and the U.

  • S wants to buy it for €33 billion.

  • Authorities could still intervene.

  • 18 EU member states declared the semiconductor industry as strategically important Back in December.

  • The industry is set to receive billions in EU subsidies to maintain Europe's technological independence.

  • The world's chip makers are mainly concentrated in Asia, with a 70% market share.

  • The world's largest supplier, TSMC, is based in Taiwan.

  • American firms have a roughly 20% share of the market, while Europe lags behind at 8%.

  • European firms long underestimated the importance of microchips.

  • Just take cars and trucks.

  • Europe, long specialized in high quality mechanical engineering.

  • But today's vehicles are increasingly resembling Dr Herbal computers.

  • Europe has neglected the semiconductor industry, long seen as low margin and volatile, that's now become the continent's Achilles heel.

  • For more, let's bring in our business correspondent Chelsea Delaney, Chelsea.

  • We heard about the troubles the shortage of semiconductors are causing to the auto industry in particular.

  • Will this deal now help resolve the problem?

  • No.

  • The shortage in semiconductors is likely to last for for several more months, at the very least, despite these mergers.

  • And this is particularly a problem for the auto industry because we've seen a huge increase in demand for semiconductors as there's been a boom in sales of home tech equipment, people moving to home office people buying things like PlayStations.

  • And it's much more profitable for semiconductor makers to make the products for that tech equipment instead of the auto equipment.

  • That's a very low margin business.

  • So all of the capacity right now is being directed at the home tech market.

  • Uh, and so these these mergers that we're seeing it will in the long term likely boost production.

  • But for now, automakers are really low down on the priority list for semiconductor makers, and it takes a long time to ramp up capacity now.

  • Chelsea In a different aspect of the story, German political leaders have been worried recently about German companies, including their technology being taken over by foreign players.

  • Now what's the mood regarding this takeover of silt tronic by global waivers?

  • It's definitely causing anxiety both here in Berlin and at the broader e level, because the EU really is pushing forward with the digitalization.

  • That's really the future they see.

  • And that future is dependent on access to chips.

  • And the EU doesn't want to be dependent on Asia or the U.

  • S.

  • For access to semiconductors, because we've seen how that technology can be used as a pawn in some of these geopolitical conflicts like we've seen between the US and China in the past few years.

  • So the EU really wants to secure its own independent base of of chips and and deals like this raised concern that that's not going to be possible.

  • Charles de Delaney.

now a shortage of silicon chips is forcing automakers to cut back on production.

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Microchip shortage is slowing down the global economy | DW News

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    林宜悉 posted on 2021/02/28
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