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Researched by Industrial Info Resources (Sugar Land, Texas)--The global semiconductor chip shortage continues to impact production across a variety of manufacturing sectors, including consumer electronics, appliances, and most notably, automotive. The shortage has forced U.S. automakers to cut production and idle factories, as the number of domestically produced vehicles in June reached its lowest total since May 2020, according to the U.S. Bureau of Economic Analysis (BEA). Despite the tumult, Industrial Info is tracking more than $10 billion of automotive projects that are under construction in the manufacturing-heavy Great Lakes region, which consists of Illinois, Indiana, Kentucky, Michigan, Ohio and Wisconsin.
Subscribers to Industrial Info's Global Market Intelligence (GMI) Industrial Manufacturing Project Database can click here for a full list of detailed project reports.
Click on the image at right for a graph showing automobile projects under construction in the Great Lakes region, by state.
It is widely expected that the global chip shortage will continue well into 2022, although Taiwan Semiconductor Manufacturing Company (Hsinchu, Taiwan) -- the world's largest chipmaker -- expects the automotive chip shortage "to be greatly reduced" for its customers starting in the third quarter, Chief Executive Officer C.C. Wei said during the company's earnings conference call on July 15.
However, the damage has already been done: only 119,400 vehicles were produced in the U.S. in June, down from 138,300 in May and 131,500 in April, according to the latest data from the U.S. Bureau of Economic Analysis -- a far cry from the 218,100 vehicles in January 2020. Meanwhile, new car inventories are not expected to begin recovering until September and will continue at pre-pandemic levels through next year, according to a recent report from Goldman Sachs (NYSE:GS) (New York, New York).
Automakers have been forced to idle or reduce production as of late. General Motors (NYSE:GM) (GM) (Detroit, Michigan) announced on Tuesday it would once again temporarily halt most of its full-size pickup production, for one week beginning August 9, by idling its Flint Assembly Plant in Michigan, Fort Wayne Assembly Plant in Indiana and Silao Assembly Plant in Mexico. This comes after the plants were recently restarted following downtime in mid-July.
There is hope for the future, though, as Industrial Info is tracking a substantial number of automobile projects under construction across the Great Lakes region.
At the Flint plant, an upgrade and equipment addition is planned to be completed at the end of August. New equipment at the 5.2 million-square-foot facility will allow GM to expand production of its full-size heavy-duty Chevrolet Silverado and GMC Sierra pickup trucks. GM also is at work on a $75 million expansion at its Toledo Transmission Plant in Ohio, to increase the plant's capacity of 10-speed transmissions for full-size trucks. The project kicked off in March, and completion is expected at the end of August. Subscribers can learn more from Industrial Info's detailed reports on the Flint and Toledo projects.
Fiat Chrysler Automobiles (NYSE:FCAU) (London, England) is in the middle of $900 million worth of upgrades at its Jefferson North Assembly Plant in Detroit, Michigan. The upgrades would expand production and testing for the next-generation Grand Cherokee and Dodge Durango models, along with new plug-in hybrid vehicles (PHEV). Completion is expected at the end of the year. For more information, see Industrial Info's project report.
Toyota Motor Corporation (NYSE:TM) (Toyota City, Japan) is at work on a $700 million retooling and expansion at its Princeton Truck and SUV Assembly Plant in Indiana, in order to boost production of its Highlander model by 40,000 units per year. Completion is not expected until December 2022. For more information, see Industrial Info's project report.
Semiconductor chips are indispensable components of not just vehicles, and the shortage has impacted the production of items like smartphones, video game consoles and home appliances; 169 U.S. industries utilize semiconductors in their products, according to Goldman Sachs. The home appliance sector has embraced smart technology in recent years, facilitating a need for computer chips in its products. Whirlpool Corporation (NYSE: WHN) (Benton Harbor, Michigan) saw chip deliveries in March fall short of its orders by about 10%, Jason Ai, the president of Whirlpool in China, told Reuters. And in its recent second-quarter earnings call, company chairman and Chief Executive Officer Marc Robert Bitzer said he expects "the semiconductor challenges will not go away any time soon," and added, "I think you may see that well into 2022."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
Subscribers to Industrial Info's Global Market Intelligence (GMI) Industrial Manufacturing Project Database can click here for a full list of detailed project reports.
Click on the image at right for a graph showing automobile projects under construction in the Great Lakes region, by state.It is widely expected that the global chip shortage will continue well into 2022, although Taiwan Semiconductor Manufacturing Company (Hsinchu, Taiwan) -- the world's largest chipmaker -- expects the automotive chip shortage "to be greatly reduced" for its customers starting in the third quarter, Chief Executive Officer C.C. Wei said during the company's earnings conference call on July 15.
However, the damage has already been done: only 119,400 vehicles were produced in the U.S. in June, down from 138,300 in May and 131,500 in April, according to the latest data from the U.S. Bureau of Economic Analysis -- a far cry from the 218,100 vehicles in January 2020. Meanwhile, new car inventories are not expected to begin recovering until September and will continue at pre-pandemic levels through next year, according to a recent report from Goldman Sachs (NYSE:GS) (New York, New York).
Automakers have been forced to idle or reduce production as of late. General Motors (NYSE:GM) (GM) (Detroit, Michigan) announced on Tuesday it would once again temporarily halt most of its full-size pickup production, for one week beginning August 9, by idling its Flint Assembly Plant in Michigan, Fort Wayne Assembly Plant in Indiana and Silao Assembly Plant in Mexico. This comes after the plants were recently restarted following downtime in mid-July.
There is hope for the future, though, as Industrial Info is tracking a substantial number of automobile projects under construction across the Great Lakes region.
At the Flint plant, an upgrade and equipment addition is planned to be completed at the end of August. New equipment at the 5.2 million-square-foot facility will allow GM to expand production of its full-size heavy-duty Chevrolet Silverado and GMC Sierra pickup trucks. GM also is at work on a $75 million expansion at its Toledo Transmission Plant in Ohio, to increase the plant's capacity of 10-speed transmissions for full-size trucks. The project kicked off in March, and completion is expected at the end of August. Subscribers can learn more from Industrial Info's detailed reports on the Flint and Toledo projects.
Fiat Chrysler Automobiles (NYSE:FCAU) (London, England) is in the middle of $900 million worth of upgrades at its Jefferson North Assembly Plant in Detroit, Michigan. The upgrades would expand production and testing for the next-generation Grand Cherokee and Dodge Durango models, along with new plug-in hybrid vehicles (PHEV). Completion is expected at the end of the year. For more information, see Industrial Info's project report.
Toyota Motor Corporation (NYSE:TM) (Toyota City, Japan) is at work on a $700 million retooling and expansion at its Princeton Truck and SUV Assembly Plant in Indiana, in order to boost production of its Highlander model by 40,000 units per year. Completion is not expected until December 2022. For more information, see Industrial Info's project report.
Semiconductor chips are indispensable components of not just vehicles, and the shortage has impacted the production of items like smartphones, video game consoles and home appliances; 169 U.S. industries utilize semiconductors in their products, according to Goldman Sachs. The home appliance sector has embraced smart technology in recent years, facilitating a need for computer chips in its products. Whirlpool Corporation (NYSE: WHN) (Benton Harbor, Michigan) saw chip deliveries in March fall short of its orders by about 10%, Jason Ai, the president of Whirlpool in China, told Reuters. And in its recent second-quarter earnings call, company chairman and Chief Executive Officer Marc Robert Bitzer said he expects "the semiconductor challenges will not go away any time soon," and added, "I think you may see that well into 2022."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
