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Highlights
- Japanese carmaker Toyota became the latest automotive firm to announce production cuts over an industry wide semiconductor shortage.
- The current chip shortage is estimated to last up to at least 2022, keeping the chip makers in great demand.
LSE listed Japanese automotive manufacturer Toyota Motor Corp (LON:TYT) slashed its global production output by 40 per cent for next month due to an ongoing global chip shortage, according to reports. Toyota’s shares fell sharply following the announcement.
The latest move will reduce the carmaker’s production volumes from 900,000 cars in September down to 500,000 cars. The rising covid-19 cases in Asia has further exacerbated the semiconductor shortage. Toyota became the latest automaker to cut its production volumes due to the ongoing chip shortage which began in 2020.
The company however held its previously announced FY 2021 full year production forecast of 8.7 million, despite the shortage and rising raw material costs.
Toyota’s (LON:TYT) share price performance
Toyota’s shares were lost over 4.5 percent in last day’s trade and a further around a per cent in today’s (20 August 2021) trade, at JPY 9,229.
Toyota’s market cap stands at £ 211,359.08 million and its one-year return is at 29.53 per cent as of 19 August.
Now, let us take a deeper dive into 2 FTSE listed semiconductor manufacturing companies and how they have been faring on the stock exchange:
- Samsung Electronics Co Ltd (ATT) (LON:SMSD)
FTSE IOB index constituent firm Samsung Electronics is an electronics and computer peripherals manufacturer. The company is said to be planning to set up a battery cell plant for electric vehicles based in Normal, Illinois according to Senator Dick Durbin.
The company plans to make an investment of at least KRW 3 trillion for manufacturing electric car batteries for EV maker Stellantis and also at least KRW 1 trillion for another EV maker Rivian, according to reports.
(Image Source: Refinitiv)
Samsung Electronics’ shares were trading at USD 1,439.00, down by 1.39 per cent as of 20 August at 11:08 AM GMT+1.
The company’s market cap stands at £35,129.75 million and its one year return to shareholders is at 35.15 per cent as of 20 August.
- Nanoco Group PLC (LON:NANO)
Nanoco is a UK based nanotechnology company used in infra-red sensing applications across electronics, automotive and other industries. The company manufactures cadmium free quantum dots which are semiconductor nanocrystals.
Nanoco recently announced a non-dilutive loan subscription worth up to £3.15 million for 4,500,000 loan notes. The raised capital will be used to increase the company’s cash runway on its commercial production orders and will also help in its ongoing litigation with Samsung.
(Image Source: Refinitiv)
Nanoco’s shares were trading at GBX 18.50, down by 5.16 per cent as of 20 August at 11:15 AM GMT+1. The company’s market cap stands at £59.30 million and its one-year return to shareholders stood at 7.14 per cent as of 20 August.
Related Article: 5 FTSE electric vehicle stocks to buy in August
Bottom Line
Electric vehicles have increasingly gained mass attention with several major tech companies and legacy car makers planning their own EV model.
However, there is global semiconductor shortage which was caused due to temporary shutdown of companies during the pandemic and an increasing backlog of chips due to continuing demand.
Several countries have made announcements for ramping up their semiconductor manufacturing, in response to the chip crunch, however, the current chip shortage is estimated to last up to at least 2022, keeping the chip makers in great demand.
