Government authorities and major carmakers in China are calling for efforts to alleviate the effects of chip shortages that have hurt the global auto industry for more than a year. The chip crisis reduced global vehicle production by more than 10 million units in 2021, of which 2 million were in China, according to AutoForecast Solutions. The situation now is less severe than in 2021, with production reduced by 650,000 units by the first week of March. China’s largest SUV and pickup truck maker Great Wall Motors saw its sales plunge more than 20% in February to 70,792 units. It said the major cause was its sole supplier Bosch had failed to produce enough electronic stability systems due to chip shortages. Great Wall Motors said: “We are working with Bosch and chipmakers to raise their production to solve the current problem.” Wang Fengying, the carmaker’s President, said automotive-grade chips currently in need are usually 55-nanometer micro-control units. They are simpler than those used in consumer electronics but are much more demanding in reliability. Because they are much cheaper than the latest semiconductors, chipmakers are not so motivated to produce them, she said.
Another Chinese car maker, Geely, has been affected as well. Its sales in February of 78,478 units represent a 46% fall from the previous month, mainly because of Bosch’s low supply of electronic stability systems. A lack of independent research and development (R&D), a high dependence on imports, and lagging development of the industrial chain are the core problems faced by China’s chip industry, said GAC President Zeng Qinghong. “Chinese companies need to strengthen research in core technologies and areas such as the manufacturing of chips and packaging, to break through the technical bottleneck,” Zeng said.
“We need to encourage overseas automotive chip companies to invest in China, and domestic car makers and components companies should optimize the layout of supply chains to minimize the effects of chip shortages,” he said. Tian Yulong, Spokesman for the Ministry of Industry and Information Technology (MIIT), said the shortage of automotive chips has gradually eased with the world’s major chip companies beefing up production, and the supply capacity of domestic chip companies also growing. The National Development and Reform Commission (NDRC) said it will make solving chip shortages a priority this year. Wang at Great Wall Motors said China should work out a five-year or even 10-year plan to foster the local sector, the China Daily reports.
