ARCHIVED - Worldwide Microchip shortage forces vehicle manufacturers in Spain to halt and limit production

The major Spanish automobile factories have all announced they are going to have to reduce shifts or halt assembly lines this week.

The effects of a current global semiconductor shortage have hit Spain’s motor sector, with all the major brands forced to reduce or halt production in factories all over the country due to a lack of microchips.

The global chip crisis is affecting a wide range of sectors, caused partly by the covid crisis, but also exacerbated by the China-US trade war and the drought in Taiwan; this drought in 2021 is the worst for more than half a century and has caused significant manufacturing difficulties for Taiwan companies, which use large volumes of ultra-pure water in the manufacture of chips for export.

The Covid lockdowns sparked off a surge in demand for electrical devices such as webcams, monitors and computers, which led to increased sales and a resulting shortage of electronic chips.

This was exacerbated by the China-US trade war, as in 2020 the US government placed restrictions on Semiconductor Manufacturing International Corporation (SMIC), China's biggest chip manufacturer, which made it harder for them to sell to companies with American ties. These restrictions forced companies to use other manufacturing plants such as Taiwan Semiconductor Manufacturing Company Limited (TSMC) and Samsung, which were already producing at maximum capacity and are now facing the aforementioned drought problem; this has now fed down into the Spanish car manufacturing sector, causing the need for manufacturing shutdowns in order to control production.

Renault was one of the first to feel the effects of the shortage and placed staff under an ERTE (temporary employment suspension scheme) on 16 April, which will remain in force at the brand's facilities in Valladolid and Palencia until the end of September. 

The Stellantis Group, which makes vehicles for Citröen, Peugeot, Opel, DS, Fiat, Alfa Romeo and Jeep, has also had to introduce ERTEs at its factory in Zaragoza and has been reducing shifts and production at its facilities in Vigo since the beginning of the month.

Ford’s factory in Almussages, Valencia, has just started up again after halting vehicle manufacture for seven days and motor production for nine days due to the semiconductor shortage.

Seat reported having to cancel three days of Audi 1 production at the brand’s plant in Martorell, Barcelona, as it did not have enough microchips to make the car, and Volkswagen Navarra will also be halting production for at least three days this week. The latter has some 5,000 incomplete cars on the factory grounds due to a lack of chips but hopes to manage to dispatch 1,500 Polos.

Meanwhile, Mercedes-Benz announced that its factory in Vitoria would be stopping three production shifts and was unsure whether normal production would be able to resume next week.

The automobile industry is just one of many enduring considerable difficulties at the moment due to the semiconductor shortage. Computer and mobile phone producers all over the world are also warning of reduced production capacity and many other sectors are also seeing unexpected delays as the widespread dependence on microchips becomes apparent.