Toyota, Honda, Samsung To Halt US Production As Supplies Dwindle - Kalkine Media

March 17, 2021 07:18 PM PDT | By Team Kalkine Media
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  • Most firms were reportedly relying on old stocks to maintain their limited production levels.
  • Toyota, Honda, Samsung face severe shortage of components which may affect business.
  • Samsung’s Texas facilities that account for 28 percent of its total chip output, remain shut.

Several foreign companies, including Toyota, Honda, and Samsung plan to halt production in North America as the cold weather and pandemic-related issues continue to disrupt the supply chains.

These limitations have caused an acute shortage of crucial components, such as plastic, petrochemicals, and semiconductors, used in the auto and telecommunication industries.

Most firms were reportedly relying on old stocks to maintain their limited production levels.

The region has seen extreme cold this winter, shutting down power lines, fuel production, and communication. Although the supply pressure has been felt since January, it has worsened now. Samsung said on Wednesday, March 17, the shortage of components may hurt its business in the next quarter. The South Korean company is mulling to postpone the launch of a new model of its handset.

The jammed ports and factory outages have further aggravated the situation, they said. These teething problems are particularly worrisome as these companies may be staring at a major slump, reducing their competitive edge, at a time when the global economy is gradually opening up.

According to some analysts, the supply crunch was initially limited to a few sectors, but now it has spread to almost all areas of the consumer-electronics sector. For instance, the shortage of semiconductors has been devastating for the manufacturers of smartphones, PCs, and televisions. Most industry players were caught unprepared in the situation, they said.


Pic Credit: Pixabay.

The Twin Blow Of Cold, Supply Impact On Cos

Samsung, the world’s largest smartphone manufacturer and one of the biggest chip makers, had to suspend operations at two of its key factories in Austin, Texas, in February. The facilities account for about 28 percent of the South Korean company’s total output, analysts say. Also, the Dutch chip maker, NXP Semiconductors, was forced to limit its productions in Austin due to the bizarre weather.

Toyota said on Wednesday that it has cut production activities in its Kentucky plant where it manufactures Camry and Avalon sedans due to the shortage of petrochemicals. The limitations will affect its production of Tacoma pickup trucks in neighboring Mexico.

Honda has said that it will halt production in most of its factories in the US and Canada due to the current constraints. The shutdown to take effect by March 22, the company said in a statement. However, the workers will continue to receive their salaries, it added.

Other auto companies, such as Ford, Nissan, and General Motors, have also announced production cuts in the recent past due to the chip shortage and clogging of major ports in the US.

The current disruptions, however, may have been a boon for some. The Taiwan Semiconductor Manufacturing Corp has said that it is increasing its production capacity to keep up with the demand.


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