- Internal warnings at Volkswagen (OTCPK:VWAGY) suggest the automaker faces a bigger production hit in the second quarter than the first from the global chip shortage.
- "We are being told from the suppliers and within the Volkswagen Group that we need to face considerable challenges," VW exec Wayne Griffiths tells the Financial Times.
- Volkswagen has halted production at several locations across Europe.
- The recent power outage at a TSMC (NYSE:TSM) facility and damaging winter storm in Texas added additional strain to global auto chip production.
- The ongoing chip shortage has seen Ford (NYSE:F) close a dozen more facilities in North America and Europe, while Jaguar Land Rover (NYSE:TTM) is shutting two of its U.K. factories. Renault (OTC:RNSDF) suspended production guidance due to the issue and Daimler (OTCPK:DDAIF) is reducing employee hours to adjust to the lower rate of production. In early February, General Motors (NYSE:GM) warned the global automotive chip shortage could cut 2021 earnings by up to $2B. Some analysts are wondering if the figure could be adjusted higher alongside the Q1 earnings report.
- The chip situation adds pressure on automakers to pick the right models to focus on just as many brands are turning electric.
- Notable chip makers for the auto industry include NXP Semiconductors (NASDAQ:NXPI), Texas Instruments (NASDAQ:TXN), ON Semiconductor (NASDAQ:ON), STMicroelectronics (NYSE:STM) and TSMC.
- What to watch: Intel in talks to serve as foundry for auto chip companies amid shortage and auto suppliers are being sized up ahead of earnings with the chip shortage in the mix.