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Business

Stellantis closing 5 North American vegetation attributable to chip scarcity

A member of United Auto Worker leaves the Fiat Chrysler Automobiles Warren truck plant after the first shift on May 18, 2020 in Warren, Michigan.

Gregory Shamus | Getty Images

A global shortage of semiconductor chips is forcing Stellantis to temporarily close five North American plants starting next week, the company confirmed on Friday afternoon.

The affected plants are in Illinois, Michigan, Mexico and two in Ontario, Canada. They build a range of products for the company – from older Ram 1500 pickup trucks and Jeep models to minivans and Dodge and Chrysler cars. The facilities, which used to belong to Fiat Chrysler, are expected to be closed from Monday to early or mid-April, according to the company

“Stellantis continues to work closely with our suppliers to reduce the manufacturing impact caused by the various supply chain problems in our industry,” the company said in a statement emailed to CNBC. A Stellantis spokeswoman declined to indicate how many production units are likely to be lost.

Semiconductors are, among other things, key components for infotainment, power steering and brakes in new vehicles. Suppliers have moved semiconductors away from the automotive industry as several plants were closed due to Covid in the past year.

Consulting firm AlixPartners estimates the chip shortage will reduce global auto industry sales by $ 60.6 billion this year.

The deficiency affects every automaker differently. Several manufacturers, including General Motors, Ford Motor and the Chinese EV start-up Nio, also announced production cuts or plans to extend downtime at facilities already affected this week.

Vehicles affected by Stellantis’ production stops include the Chrysler 300 sedan, as well as the Pacifica and Voyager minivans, Dodge Charger and Challenger vehicles, Jeep Cherokee and Compass SUVs, and the Ram 1500 Classic pickup. A newer version of the Ram 1500 continues to be produced at a different facility in Michigan.

Stellantis is the merged automaker of Fiat Chrysler and France-based Groupe PSA. In the USA, the core brands include Alfa Romeo, Chrysler, Dodge, Fiat, Jeep and Ram.

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Health

President Biden Takes 1st Tentative Steps to Deal with International Covid-19 Vaccine Scarcity

WASHINGTON – President Biden was under heavy pressure on Friday to donate excess coronavirus vaccines to nations in need to otherwise address global shortages and partnered with Japan, India and Australia to increase global manufacturing capabilities Expand vaccines.

In an agreement announced at the so-called Quad Summit, a virtual meeting of the heads of state and government of the four countries, the Biden government pledged to provide financial support to enable Biological E, a large vaccine manufacturer in India, to manufacture at least 1 Billion doses of coronavirus to help vaccines by the end of 2022.

This would fix acute vaccine shortages in Southeast Asia and beyond without risking the domestic setback of exporting cans in the coming months as Americans demand their shots.

The United States has fallen far behind China, India and Russia in the race to adopt coronavirus vaccines as an instrument of diplomacy. At the same time, Mr Biden is accused of hoarding vaccines from global health lawyers who want his government to route supplies to nations in need desperately seeking access.

The president insisted that Americans come first and has so far refused to make any specific commitments to free US-made vaccines, despite tens of millions of doses of the British-Swedish company AstraZeneca’s vaccine idling in American manufacturing facilities .

“If we have a surplus, we will share it with the rest of the world,” Biden said this week, adding, “We will first make sure that the Americans are taken care of first, but then we will try the rest of the world to help. “

In fact, the president still has a lot of work to do domestically to keep the promises made in the past few days: All states must question all adults for vaccinations by May 1st so that enough vaccine doses are available by the end of May to vaccinate every American adult, and that by July 4th, if Americans continue to follow public health guidelines, life should return to a semblance of normalcy.

Vaccine supplies seem on track to meet these goals, but the president still needs to put in place the infrastructure to manage the doses and overcome reluctance in large parts of the population to take them.

Still, Mr Biden has also made restoring US leadership a core part of his foreign policy agenda after his predecessor’s alliances frayed and relations with allies and global partners strained. His Foreign Secretary, Antony J. Blinken, said in a recent BBC interview that a global vaccination campaign would be part of this effort. Washington is “determined” to be an “international leader” in vaccinations.

Foreign policy experts and global health activists see clear diplomatic, public and humanitarian reasons for this.

“It’s time for US leaders to ask themselves: When this pandemic is over, do we want the world to remember America’s leadership in helping distribute life-saving vaccines, or will we leave that to others?” said Tom Hart, the North American executive director of One Campaign, a nonprofit founded by U2 singer Bono and dedicated to eradicating global poverty.

The federal government has bought 453 million surplus doses of vaccine, the group says. She has asked the Biden administration to share 5 percent of their doses overseas when 20 percent of Americans have been vaccinated, and gradually increase the percentage of divided doses as more Americans receive their vaccines.

According to the Centers for Disease Control and Prevention, 13.5 percent of people in the United States who are 18 years of age or older were fully vaccinated as of Friday.

The authoritarian governments of China and Russia, less affected by national public opinion, are already using vaccines to expand their sphere of influence. As the Biden government plans its strategy to counter China’s growing global clout, Beijing is polishing its image by shipping vaccines to dozens of countries on multiple continents, including Africa, Latin America, and the Southeast Asian backyard in particular.

Russia has been providing vaccines to Eastern European countries like Hungary, the Czech Republic and Slovakia at a time when Biden officials want to unify the European Union against Russian influence on the continent.

“We may be outdone by others who are more willing to share, even if they do so for cynical reasons,” said Ivo H. Daalder, former NATO ambassador and president of the Chicago Council on Global Affairs. “I think countries will remember who was there for us when we needed them.”

Updated

March 13, 2021, 3:49 p.m. ET

In the face of worrying and highly contagious new varieties in the US and around the world, public health experts say vaccinating people overseas is necessary to protect Americans too.

“It has to be sold to Americans to keep Americans safe over the long term, and it has to be sold to a highly divided, toxic America,” said J. Stephen Morrison, a global health expert with Centers for Strategic and International Studies. “I don’t think that’s impossible. I think Americans are beginning to understand that in a world of variation, anything that happens outside of our borders increases the urgency to act really quickly. “

Mr Blinken also said this to the BBC: “Until everyone in the world is vaccinated, nobody is really completely safe.”

The quad vaccine partnership announced at the summit on Friday includes different commitments from each of the nations, according to the White House.

In addition to supporting the Indian vaccine maker, the US has pledged at least $ 100 million to bolster vaccination capacity overseas and support public health efforts. Japan is “in discussion” to provide loans to the Indian government to expand the production of vaccines for export and will support vaccination programs for developing countries. Australia will allocate $ 77 million for vaccine provision and delivery assistance with a focus on Southeast Asia.

The four countries will also form oneQuad Vaccine Experts Group byTop scientists and government officials who will work to overcome production hurdles and funding plans.

Mr Morrison said the government deserves “some credit” for the effort, adding, “It shows diplomatic ingenuity and speed.” However, a spokesman for One Campaign, which focuses on extreme poverty, said his group would still see a plan for the United States’ vaccine supply, noting that Africa had given far fewer doses per capita than Asia.

Mr Biden’s efforts to ramp up vaccine production helped the United States produce up to a billion doses by the end of the year – far more than needed to vaccinate the roughly 260 million adults in the United States.

What you need to know about the vaccine rollout

A government-brokered deal to see drug company Merck manufacture Johnson & Johnson’s single-dose vaccine, which the president celebrated in the White House on Wednesday, will help achieve that goal. Also on Wednesday, Mr Biden directed federal health officials to source an additional 100 million doses of the vaccine from Johnson & Johnson.

The government has stated that these efforts are aimed at having enough vaccines for children, booster doses, to face new varieties and unforeseen events. Jeffrey D. Zients, Mr Biden’s coronavirus response coordinator, told reporters Friday that the Johnson & Johnson-Merck deal would also “expand capacity and ultimately benefit the world”.

Not only did Mr Biden resist the urge to dump excess doses, but he also criticized the Liberal Democrats for blocking a motion by India and South Africa for a temporary waiver of an international intellectual property agreement that would make it easier for poorer countries to access generic versions of Coronavirus vaccines and treatments.

“I understand why we should prioritize our supply to Americans – it was paid for by American taxpayers, President Biden is President of America,” said Representative Ro Khanna, a Liberal Democrat from California. “But there is no reason to prioritize the profits of pharmaceutical companies over the dignity of other countries.”

Mr Biden recently announced a $ 4 billion donation to Covax, the international vaccine initiative supported by the World Health Organization. David Bryden, director of the Frontline Health Workers Coalition, a nonprofit that supports health workers in low- and middle-income countries, said money was also urgently needed to train and pay these workers to administer vaccines overseas.

However, that donation and the Quad’s announcement of financial support for vaccine production on Friday fell short of the urgent demands of public health advocates for the United States to provide ready-to-use doses that can be quickly injected.

However, the quad’s focus on Southeast Asia most likely reflects an awareness of China’s gratitude in the region for Beijing’s focus in its vaccine distribution efforts.

If Mr Biden is widely viewed as helping the world recover from the coronavirus pandemic, that could become part of his legacy when President George W. Bush made a huge investment in public health funding in the 2000s the AIDS crisis in Africa responded. More than a decade later, Bush and the United States continue to be revered across much of the continent for the President’s Emergency Plan for AIDS Relief (Pepfar), which the government said has spent $ 85 billion and saved 20 million lives.

Michael Gerson, a former Bush White House speechwriter and policy advisor who helped shape the Pepfar program, said its impact has been both moral and strategic and that the program has been “an enormous amount of money to the United States.” goodwill “in Africa.

“I think the principle here should be that the people who need it most should get it, no matter where they live,” he said. “There is little moral sense in giving the vaccine to a healthy American 24-year-old in front of a front-line worker in Liberia.”

But he added, “It’s very difficult for an American politician to explain.”

Ana Swanson contributed to the coverage

Categories
Health

Biden Takes First Tentative Steps to Handle International Vaccine Scarcity

WASHINGTON – President Biden was under heavy pressure on Friday to donate excess coronavirus vaccines to nations in need to otherwise address global shortages and partnered with Japan, India and Australia to increase global manufacturing capabilities Expand vaccines.

In an agreement announced at the so-called Quad Summit, a virtual meeting of the heads of state and government of the four countries, the Biden government pledged to provide financial support to enable Biological E, a large vaccine manufacturer in India, to manufacture at least 1 Billion doses of coronavirus to help vaccines by the end of 2022.

This would fix acute vaccine shortages in Southeast Asia and beyond without risking the domestic setback of exporting cans in the months ahead as Americans demand their shots.

The United States has fallen far behind China, India and Russia in the race to adopt coronavirus vaccines as an instrument of diplomacy. At the same time, Mr Biden is accused of hoarding vaccines from global health lawyers who want his government to route supplies to nations in need desperately seeking access.

The president insisted that Americans come first and has so far refused to make any specific commitments to free US-made vaccines, despite tens of millions of doses of the British-Swedish company AstraZeneca’s vaccine idling in American manufacturing facilities .

“If we have a surplus, we will share it with the rest of the world,” Biden said this week, adding, “We will first make sure that the Americans are taken care of first, but then we will try the rest of the world to help. “

In fact, the president still has a lot of work to do domestically to keep the promises made in the past few days: All states must question all adults for vaccinations by May 1st so that enough vaccine doses are available by the end of May to vaccinate every American adult, and that by July 4th, if Americans continue to follow public health guidelines, life should return to a semblance of normalcy.

Vaccine supplies seem on track to meet these goals, but the president still needs to put in place the infrastructure to manage the doses and overcome reluctance in large parts of the population to take them.

Still, Mr Biden has also made restoring US leadership a core part of his foreign policy agenda after his predecessor’s alliances frayed and relations with allies and global partners strained. His Foreign Secretary, Antony J. Blinken, said in a recent BBC interview that a global vaccination campaign would be part of this effort. Washington is “determined” to be an “international leader” in vaccinations.

Foreign policy experts and global health activists see clear diplomatic, public and humanitarian reasons for this.

“It’s time for US leaders to ask themselves: When this pandemic is over, do we want the world to remember America’s leadership in helping distribute life-saving vaccines, or will we leave that to others?” said Tom Hart, the North American executive director of One Campaign, a nonprofit founded by U2 singer Bono and dedicated to eradicating global poverty.

The federal government has bought 453 million surplus doses of vaccine, the group says. She has asked the Biden administration to share 5 percent of their doses overseas when 20 percent of Americans have been vaccinated, and gradually increase the percentage of divided doses as more Americans receive their vaccines.

According to the Centers for Disease Control and Prevention, 13.5 percent of people in the United States who are 18 years of age or older were fully vaccinated as of Friday.

The authoritarian governments of China and Russia, less affected by national public opinion, are already using vaccines to expand their sphere of influence. As the Biden government plans its strategy to counter China’s growing global clout, Beijing is polishing its image by shipping vaccines to dozens of countries on multiple continents, including Africa, Latin America, and the Southeast Asian backyard in particular.

Russia has been providing vaccines to Eastern European countries like Hungary, the Czech Republic and Slovakia at a time when Biden officials want to unify the European Union against Russian influence on the continent.

“We may be outdone by others who are more willing to share, even if they do so for cynical reasons,” said Ivo H. Daalder, former NATO ambassador and president of the Chicago Council on Global Affairs. “I think countries will remember who was there for us when we needed them.”

Updated

March 12, 2021, 5:39 p.m. ET

In the face of worrying and highly contagious new varieties in the US and around the world, public health experts say vaccinating people overseas is necessary to protect Americans too.

“It has to be sold to Americans to keep Americans safe over the long term, and it has to be sold to a highly divided, toxic America,” said J. Stephen Morrison, a global health expert with Centers for Strategic and International Studies. “I don’t think that’s impossible. I think Americans are beginning to understand that in a world of variation, anything that happens outside of our borders increases the urgency to act really quickly. “

Mr Blinken also said this to the BBC: “Until everyone in the world is vaccinated, nobody is really completely safe.”

The quad vaccine partnership announced at the summit on Friday includes different commitments from each of the nations, according to the White House.

In addition to supporting the Indian vaccine maker, the US has pledged at least $ 100 million to bolster vaccination capacity overseas and support public health efforts. Japan is “in discussion” to provide loans to the Indian government to expand the production of vaccines for export and will support vaccination programs for developing countries. Australia will allocate $ 77 million for vaccine provision and delivery assistance with a focus on Southeast Asia.

The four countries will also form oneQuad Vaccine Experts Group byTop scientists and government officials who will work to overcome production hurdles and funding plans.

Mr Morrison said the government deserves “some credit” for the effort, adding, “It shows diplomatic ingenuity and speed.” However, a spokesman for One Campaign, which focuses on extreme poverty, said his group would still see a plan for the United States’ vaccine supply, noting that Africa had given far fewer doses per capita than Asia.

Mr Biden’s efforts to ramp up vaccine production helped the United States produce up to a billion doses by the end of the year – far more than needed to vaccinate the roughly 260 million adults in the United States.

What you need to know about the vaccine rollout

A government-brokered deal to see drug company Merck manufacture Johnson & Johnson’s single-dose vaccine, which the president celebrated in the White House on Wednesday, will help achieve that goal. Also on Wednesday, Mr Biden directed federal health officials to source an additional 100 million doses of the vaccine from Johnson & Johnson.

The government has stated that these efforts are aimed at having enough vaccines for children, booster doses, to face new varieties and unforeseen events. Jeffrey D. Zients, Mr Biden’s coronavirus response coordinator, told reporters Friday that the Johnson & Johnson-Merck deal would also “expand capacity and ultimately benefit the world”.

Not only did Mr Biden resist the urge to dump excess doses, but he also criticized the Liberal Democrats for blocking a motion by India and South Africa for a temporary waiver of an international intellectual property agreement that would make it easier for poorer countries to access generic versions of Coronavirus vaccines and treatments.

“I understand why we should prioritize our supply to Americans – it was paid for by American taxpayers, President Biden is President of America,” said Representative Ro Khanna, a Liberal Democrat from California. “But there is no reason to prioritize the profits of pharmaceutical companies over the dignity of other countries.”

Mr Biden recently announced a $ 4 billion donation to Covax, the international vaccine initiative supported by the World Health Organization. David Bryden, director of the Frontline Health Workers Coalition, a nonprofit that supports health workers in low- and middle-income countries, said money was also urgently needed to train and pay these workers to administer vaccines overseas.

However, that donation and the Quad’s announcement of financial support for vaccine production on Friday fell short of the urgent demands of public health advocates for the United States to provide ready-to-use doses that can be quickly injected.

However, the quad’s focus on Southeast Asia most likely reflects an awareness of China’s gratitude in the region for Beijing’s focus in its vaccine distribution efforts.

If Mr Biden is widely viewed as helping the world recover from the coronavirus pandemic, that could become part of his legacy when President George W. Bush made a huge investment in public health funding in the 2000s the AIDS crisis in Africa responded. More than a decade later, Bush and the United States continue to be revered across much of the continent for the President’s Emergency Plan for AIDS Relief (Pepfar), which the government said has spent $ 85 billion and saved 20 million lives.

Michael Gerson, a former Bush White House speechwriter and policy advisor who helped shape the Pepfar program, said its impact has been both moral and strategic and that the program has been “an enormous amount of money to the United States.” goodwill “in Africa.

“I think the principle here should be that the people who need it most should get it, no matter where they live,” he said. “There is little moral sense in giving the vaccine to a healthy American 24-year-old in front of a front-line worker in Liberia.”

But he added, “It’s very difficult for an American politician to explain.”

Ana Swanson contributed to the coverage

Categories
Business

Porsche CEO warns of ‘very severe’ international chip scarcity

The CEO of Porsche warned on Monday that the daily operations of the German luxury car maker could be affected by a “very serious” global semiconductor shortage in the coming months.

“The semiconductor issue is very serious, as the entire industry is affected by the great demand for consumer electronics and the faster return of the automotive sector,” said Oliver Blume, CEO of Porsche, on Monday to CNBC’s “Squawk Box Europe”.

“We could be affected every day, so we will be watching very closely over the next few days and months what we can do. We have to relax in the short term and look for long-term measures.”

His comments come after a sudden surge in global auto sales late last year that coincided with a lack of essential chip components. The delivery bottlenecks brought the assembly lines of the chip-dependent automotive industry to a standstill and stopped the production of hundreds of thousands of vehicles worldwide.

Demand for these chips or semiconductors has increased during the coronavirus pandemic as consumers bought game consoles, laptops and televisions in an era of limited mobility.

Many of these products – including certain Chromebook laptops and next-generation consoles like the Xbox Series X and PlayStation 5 – are either sold out or have long lead times.

Supply chains

According to analysts, the chip shortage has hit the automotive industry particularly hard because of the industry’s “just-in-time” supply chain that the automotive industry has relied on for decades to save capital.

When asked whether Porsche could be forced to rethink this supply chain model, Blume replied: “Yes. This is very important for the future in order to think about the supply chain.”

“We have to think about which storage we really need for all these stocks. We have to be more flexible and plan the immediate capacities more precisely.”

The Porsche shares listed in the German Xetra Dax index have risen by 15% since the beginning of the year. The share price has barely changed in the past 12 months.

– CNBC’s Sam Shead contributed to this report.

Categories
Health

Prioritizing instructor vaccinations might be a problem till scarcity is resolved, Biden official says

Prioritizing teachers in the distribution of Covid vaccines will continue to be a challenge until more doses become available, Andy Slavitt, senior advisor to the White House’s Covid-19 response team, said Wednesday.

President Joe Biden has made reopening the country’s schools for personal teaching a top priority.

On Friday, the Centers for Disease Control and Prevention published new guidelines that teachers shouldn’t be vaccinated to safely reopen schools, but that states should give teachers priority access to Covid vaccines.

Slavitt said governors had “tough decisions” to make to juggle vaccine distribution to groups like seniors, nursing home workers and teachers.

“We are trying to support them with science as much as possible, but until the shortage is fixed we will still have these challenges,” Slavitt told CNBC’s “The News with Shepard Smith”.

The question of whether teachers should be vaccinated before returning to class has been a focus in the debate on reopening in-person teaching.

Vice President Kamala Harris said on the Today Show Wednesday morning, “Teachers should be priority.”

During a briefing on Wednesday, White House Chief Covid-19 Coordinator Jeff Zients said that while Biden and Harris believe that frontline teachers and other frontline staff should be on the front lines to get vaccines, they both do The CDC agree that vaccination of teachers “is not a requirement for schools to reopen.”

The CDC guidelines also recommend that schools adapt their reopening plans to the severity of the outbreak in their communities. The agency also recommends schools maintain “essential elements” of personal learning, including wearing masks, exercising physical distancing, and monitoring the spread in the area.

“If that were easy, it would be done,” Slavitt told CNBC. “We’re focused on how we get kids and teachers back to school – not if we should, but how. And that’s the CDC plan, in my opinion.”

Categories
World News

What’s inflicting the chip scarcity affecting PS5, automobiles and extra?

A close-up of a CPU socket and motherboard lying on the table.

Narumon Bowonkitwanchai | Moment | Getty Images

A chip shortage that started when consumers stocked up on PCs and other electronics during the Covid-19 pandemic is now threatening to disrupt auto production around the world.

On Tuesday, GM announced that it would extend production cuts in the US, Canada and Mexico through mid-March. They join a long list of major automakers, including Ford, Honda and Fiat Chrysler, who have warned investors or slowed vehicle production because of the shortage of chips.

But it’s not just the automotive industry that has problems getting enough semiconductors to build its products. AMD and Qualcomm, which sell chips to most of the leading electronics companies, have noticed the shortage in the past few weeks. Sony blamed the shortage of chips that made it so difficult to get a PlayStation 5 game console.

Chips are likely to remain scarce in the months ahead as demand remains higher than ever. The Semiconductor Industry Association announced in December that global chip sales will grow 8.4% in 2021 from the total of $ 433 billion in 2020. That’s 5.1% growth between 2019 and 2020 – a remarkable jump considering the size of the absolute numbers.

Semiconductors are in short supply due to the strong demand for electronics, the shift in business models in the semiconductor world that created a bottleneck in outsourced chip factories, and the impact of the US trade war with China that began under former President Trump.

A big boom in electronics sales

The Covid-19 pandemic has spurred demand for consumer electronics.

The first wave affected people who bought PCs, monitors, and other devices to work remotely or to go to school. Then, last fall, home entertainment devices like game consoles, televisions, smartphones and tablets flew off the shelves.

Living room with a Sony PlayStation 5 home video game console and DualSense controller next to a TV, captured on November 3, 2020.

Phil Barker | Future publishing via Getty Images

According to Gartner data, PC sales rose 4.8% to 275 million units in 2020, with growth of over 10% during the holiday season. This reversed a year-long decline and is the highest annual growth in the PC market since 2010.

Other devices also sold well. The Consumer Tech Association, an American trading group, said 2020 was the biggest year on record with retail sales of nearly $ 442 billion and is forecast to see great demand for game consoles, headphones, and smart home products in 2021.

All of these devices contain a ton of chips – not just the central processor, which can cost tens or hundreds of dollars, but also cheaper, small chips to control the display, manage power, or run a 5G modem.

“The current chip shortage begins with the unprecedented demand for personal computers and peripherals as the globe worked from home and attended school,” said Patrick Moorhead, founder of Moor Insights, a company that studies the semiconductor industry.

Electronics giants who reported record sales say they could have been even better if there had been enough supply. Apple, which recently posted a quarter of $ 111 billion, told analysts that there was insufficient supply of new iPhones to meet demand. CEO Tim Cook told Reuters that “semiconductors are very tight”.

Lisa Su, CEO of AMD, which is making the processor the focus of new consoles from Sony and Microsoft, said last month that bottlenecks could be expected at least in the first half of the year. “The industry needs to increase overall capacity,” said Su.

Business relocation to outsourcing slam factories

The shortage shows a structural change in the semiconductor industry. Many of the leading semiconductor companies are now “fabless,” meaning they only design the chips and the technology within them. Other companies, so-called foundries, are largely tasked with actually manufacturing the chips.

The foundries are run by companies like TSMC in Taiwan or Samsung in South Korea – and it turned out they were already making chips as quickly as possible. If a company cut jobs in the early days of the pandemic, it had to go back in time.

Automakers do not compete directly with high-tech companies for the same chip supply. Auto chips are usually based on older chip manufacturing technologies and do not require an upgrade.

The Ford company logo will appear on a sign outside the Chicago assembly plant in Chicago, Illinois on February 3, 2021.

Scott Olson | Getty Images

But the lack is not just due to the fastest chips, but to everything.

“The shortage in the semiconductor industry is consistently great,” said Qualcomm’s new CEO Cristiano Amon last month. “Not just leading nodes, but also legacy nodes,” referring to chip manufacturing technology.

Cars now contain dozens of tiny chips, many of which perform functions such as power management. Cars also use many microcontrollers that can control traditional automotive tasks like power steering or that are the brains at the heart of an infotainment system. Automakers also typically use “just-in-time” production, which means they don’t have to stock additional parts.

“The problem is, you can’t sell your $ 30,000 car without that 10-cent chip,” said Gaurav Gupta, a semiconductor analyst at Gartner.

“If the chip that powers the car dials or automatic braking is delayed, so will the rest of the vehicle,” Bryce Johnstone, automotive director of marketing at chip designer Imagination Technologies, previously told CNBC.

Now the automotive industry is realizing that this is a lower priority than the electronics companies in the foundries. In 2020, only 3% of TSMC’s sales were automotive chips, compared to 48% for smartphones.

Tech companies are “the volume people. They have higher margins. And they never cut their orders and have long-term contracts with the foundries,” Gupta said. “Now that this automatic demand has peaked faster than OEMs anticipated, cars can’t get back in line.”

The foundries are aware of the problem. TSMC, considered the most advanced and important foundry, said it was trying to help auto companies and that it would spend up to $ 28 billion this year to increase its capacity.

“While our capacity is at full capacity with demand from all sectors, TSMC is reallocating our wafer capacity to support the global automotive industry,” TSMC said in a January statement.

Automakers also use automotive-grade chips that are carefully “qualified” against industry standard binders to ensure they are durable and reliable. “It is more difficult for the industry to alternatively relocate their production lines and supply chains,” Trendforce, an advisory group for the semiconductor industry, wrote in a report last month.

Trump’s trade war

Last year, the United States placed restrictions on Semiconductor Manufacturing International (SMIC), the largest foundry in China. Customers have had to shift their orders to competitors like TSMC, Gupta said.

SMIC executives admitted the US move prevented the use of their full capacity when they said geopolitical factors would prevent them from taking advantage of “this year’s rare market opportunity,” indicating chip shortages.

Some companies have also decided to store key chips before the US deadline and use up production capacity last year. For example, Huawei was storing critical radio chips before the sanctions, reported Bloomberg News.

Supplies were also fueled by supply concerns when Covid took over the world. SK Hynix, a major manufacturer of memory chips, announced an increase in sales in July last year, driven by “growing concerns about the IT supply chain in general”.

Some companies that have chips in stock are now enjoying the benefits. Toyota said Wednesday that it did not expect to cut its production rate since it had been storing four months’ worth of chips to address the shortage. Toyota increased its profit guidance for the full year by 54%.

Categories
Business

Ford F-150 manufacturing reduce resulting from semiconductor chip scarcity

Ford began resuming vehicle production in the U.S. on May 18, 2020 with new coronavirus safety protocols like health assessments, personal protective equipment, and changes to facilities to increase social distancing.

ford

DETROIT – Ford Motor is significantly reducing production of its highly profitable F-150 pickup trucks due to a persistent shortage of semiconductor chips in the global automotive industry.

The automaker announced Thursday that its Dearborn, Michigan truck plant will decrease from three to one shift for one week starting Monday, while truck production at its Kansas City, Missouri assembly plant will decrease from three to two shifts. Ford spokeswoman Kelli Felker said both plants are expected to return in three shifts by the week of February 15.

“We are working closely with suppliers to address potential production constraints associated with global semiconductor shortages and to prioritize key vehicle lines for production and make the most of our semiconductor allocation,” she said in a statement sent via email.

Ford shares appeared unaffected by the cuts, rising about 3% during intraday trading late Thursday morning. The automaker is expected to announce its fourth quarter results and forecast for 2021 after the market closed on Thursday.

Automakers and suppliers warned of a semiconductor shortage late last year after vehicle demand rose faster than expected following a two-month shutdown of production facilities due to the coronavirus pandemic.

Semiconductors are extremely important components of new vehicles in areas that range from infotainment systems to more traditional parts like power steering. They are also used in consumer electronics.

Ford’s confirmed plans come a day after General Motors announced it would cease production at four assembly plants in Fairfax, Kansas, next week. Ingersoll, Ontario; and San Luis Potosi, Mexico. GM will also operate a half capacity plant in South Korea this week.

Ford and other automakers – from Nissan Motor to Volkswagen – previously stopped vehicle production due to the shortage of chips.

Kumar Galhotra, Ford President for the US and International Markets, described the chip shortage earlier this week as a “very dynamic situation”. He said the company had been working with its suppliers to reduce the impact on its plants and resolve the issue as soon as possible.

“It’s changing all the time, but we believe we will look into it for at least the first half of this year,” he told CNBC.

Categories
Business

Releasing most vaccine doses will not trigger scarcity

Boxes containing the Moderna COVID-19 vaccine are prepared for shipment at the McKesson distribution center in Olive Branch, Mississippi, United States, on December 20, 2020.

Paul Sancya | Reuters

The Biden government’s plan to release virtually every available dose of Pfizer and Moderna’s coronavirus vaccines to states shouldn’t cause supply problems later, a member of President-elect Joe Biden’s Covid-19 advisory board said Thursday.

The advisory team has had numerous discussions with vaccine manufacturers Pfizer, Moderna, and Johnson & Johnson, including about supply issues, said Dr. Celine Gounder, who sits on the panel and is an infectious disease specialist at NYU’s Grossman School of Medicine.

Aside from unforeseen “Snafu products”, the Biden government is “confident” that there will be no problem getting people to get their second shots on time, she said.

“We’re not too worried about that,” Gounder told the Johns Hopkins Bloomberg School of Public Health during a webcast on Thursday afternoon. “If you look at the production schedule, they’re going to be releasing more and more doses over time, so things really open up significantly.”

Gounder’s comment comes hours before Biden announces his plan to vaccinate the U.S. population and end the pandemic that killed at least 385,503 Americans in almost a year. Criticizing the Trump administration’s strategy of introducing vaccines, Biden said at the current pace, “It will be years, not months, for the American people to be vaccinated.”

The pace of vaccination in the US is much slower than officials had hoped. As of 9:00 a.m. ET on Wednesday, more than 29.3 million vaccine doses had been distributed in the United States, but just over 10.2 million vaccinations had been given, according to the Centers for Disease Control and Prevention. The number is a far cry from the federal government’s goal of vaccinating 20 million Americans by the end of 2020 and 50 million Americans by the end of this month.

Some state governors, including New York Governor Andrew Cuomo, have complained about the availability of vaccines, stating that the lack of doses has affected their ability to vaccinate people.

The Trump administration on Tuesday passed Biden’s plan to release most of the doses it had withheld for the second round of recording of Pfizer’s and Moderna’s two-dose vaccines.

General Gustave Perna, who oversees the logistics for President Donald Trump’s vaccination program, Operation Warp Speed, had previously said the provision of replacement doses of Covid was “good planning for the Army Officer General” to ensure the right people are available can get the shots if necessary.

To speed up the pace of vaccinations, the Trump administration also changed the way vaccine doses are assigned to states, and the CDC expanded vaccination eligibility to include anyone aged 65 and over, as well as those with comorbid conditions such as diabetes and heart disease.

Some public health experts have questioned whether companies can make more cans before people need their second shots.

Gounder said Thursday that the government still plans to hold “a small buffer” of cans in reserve.

“We’ll publish almost all of them [doses] with a little buffer left because we want to speed up the pace of vaccinations, “she said.” This is really a decision on how to manage care. It is not a recommendation about vaccine dose or schedule. “

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Semiconductor scarcity causes Ford and Nissan to chop automobile manufacturing

A Ford Escape Sport Utility Vehicle (SUV) undergoes a final inspection during production at the Ford Motor Co. assembly plant in Louisville, Kentucky, United States on Tuesday, April 28, 2015.

Luke Sharrett | Bloomberg | Getty Images

Ford Motor and Nissan Motor on Friday confirmed they were reducing vehicle production at plants in the US and Japan due to a semiconductor shortage, indicating growing concerns in the global auto industry in 2021.

Ford will shut down an SUV plant in Kentucky next week while Nissan is cutting production at a plant in Japan. Both companies said they are working closely with suppliers to resolve the situation and monitor for additional impacts.

Automakers and suppliers warned of a semiconductor shortage late last year after vehicle demand rose faster than expected after a two-month shutdown of production facilities due to the coronavirus pandemic.

Semiconductors are extremely important components of new vehicles for everything from infotainment systems to other more traditional parts like power steering. They are also easily used in consumer electronics.

German automaker Volkswagen announced last month it had adjusted production at plants in China, North America and Europe due to a lack of semiconductor shipments, according to Reuters. America’s largest automaker, General Motors, has not had to cut production, but the company is closely monitoring the situation, spokesman David Barnas said.

“We are aware of increased demand for semiconductor microchips as the auto industry continues to recover around the world,” he said in a statement sent via email. “Our supply chain organization works closely with our supply base to find solutions to our suppliers’ semiconductor needs and to reduce the impact on GM production.”

Ford’s affected plant, the Louisville Assembly Plant, builds the Ford Escape and Lincoln Corsair SUVs and employs around 3,900 hourly workers. According to Ford spokeswoman Kelli Felker, due to the shortage, it will be postponed to another planned one-week shutdown later in the year due to the shortage.

“We are working closely with suppliers to address potential production restrictions related to the global semiconductor shortage,” she said in a statement sent via email.

The affected Nissan plant, the Japanese Oppama plant, is building the Note, a small car that is not sold in the United States. Lloryn Love-Carter, a Nissan spokeswoman in the US, said the company’s domestic production was not affected by the semiconductor shortage.

“We are working closely with our supplier partners to monitor the situation and assess the potential impact on our operations in North America,” she said in a statement sent via email.