ARCHIVED - Seat closes its Barcelona factory for two days due to microchip shortage

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 June.

Ford’s factory in Almussages, Valencia, was forced to halt vehicle manufacture for seven days and motor production for nine days in June due to the semiconductor shortage.

Seat reported having to cancel three days of Audi 1 production at the brand’s plant in Martorell, Barcelona in June , as it did not have enough microchips to make the car, and Volkswagen Navarra has intermittently cancelled production, as has Mercedes-Benz at its factory in Vitoria.

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.