Frying Pan Into the Fire -- Chip Shortage

Weather Man

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China auto sales drop 20% in September as global chip shortage persists



  • Automobile sales in China declined 19.6% Y/Y in September to 2.07M vehicles, falling for a fifth consecutive month as a prolonged global shortage of semiconductors disrupts production.
  • Sales of passenger cars in September fell 17% Y/Y to 1.58M vehicles, the China Passenger Car Association said. China's car sales in Q3 2021 declined 13% Y/Y.
  • Deliveries of new-energy vehicles, which include EVs and plug-in hybrids, soared 202% from a year earlier to 334,000 units in September.
  • “We see strong sales momentum for new energy vehicles going forward,” PCA Secretary General Cui Dongshu said. “Exports to the EU have been spurring overseas shipments.”
  • Sales in China for Toyota Motor (NYSE:TM), Japan's largest automaker, fell 35.9% Y/Y to 115,000 units last month, after decreasing 11.9% in August.
  • Honda Motor (NYSE:HMC) saw new car sales drop 28.1% to 121,448 units in China in September, while its electric vehicle business was stagnant.
  • Sales for Nissan Motor (OTCPK:NSANY) also plummeted 26.2% to 104,443 units in September.
  • Volkswagen (OTCPK:VWAGY) sold 10,126 ID. series EVs in China last month.
  • EV maker Nio's (NYSE:NIO) September deliveries rose 81% M/M to 10,628 vehicles. XPeng (NYSE:XPEV) delivered 10,412 EV deliveries in September, which were up 44% over August's shipments.
  • However, Li Auto (NASDAQ:LI) September shipments fell 24.8% M/M to 7,094 Li ONEs. Tesla (NASDAQ:TSLA) sold 56,006 made-in-China vehicles in September.
 

DSG2003Mach1

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Meanwhile Tesla hums along since they didn't cancel their chip orders at the beginning of the pandemic. : D
what I was reading the other day was that they were able to switch over to a different chip with better availability and worked like mad to re-write all the firmware to support the new chip
 

tones_RS3

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When do you guys suppose this chip shortage bullshit will end?
Mid 2022?
 

Fat Boss

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Another year or two. The automakers continue to sell far fewer cars than they have demand for. All of those lost sales add to the regular demand next year and the year after.
 

DSG2003Mach1

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When do you guys suppose this chip shortage bullshit will end?
Mid 2022?

I keep seeing that they think it will ease up - not end- by late next year. They don't think some of the demand for certain items using chips is sustainable but I wouldn't hold my breath
 

Weather Man

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  • Apple (NASDAQ:AAPL) shares dipped in after-hours trading Tuesday following a report that the company is slashing its iPhone 13 production targets for this year due to ongoing component shortages in the semiconductor market.
  • According to Bloomberg, "people with knowledge of the matter" say that Apple will cut its iPhone 13 targets by as many as 10 million devices due issues affecting suppliers Broadcom (NASDAQ:AVGO) and Texas Instruments (NASDAQ:TXN). The two companies provide communications chips and technology for the iPhone, but like many in the chip sector this year, they have has had their own supply chains disrupted due to shortfalls of key semiconductor-making parts.
 

tones_RS3

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I keep seeing that they think it will ease up - not end- by late next year. They don't think some of the demand for certain items using chips is sustainable but I wouldn't hold my breath
Would be a great time for an entrepreneur to start up a chip business right here in the good 'ole U.S. of A.
Minus the ****ing taxes the traitorous politicians put on people in America starting up new businesses. Makes zero ****ing sense.
 

DSG2003Mach1

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Would be a great time for an entrepreneur to start up a chip business right here in the good 'ole U.S. of A.
Minus the ****ing taxes the traitorous politicians put on people in America starting up new businesses. Makes zero ****ing sense.
It takes so long to build a plant if demand drops by then you might be screwed. We have to play by all these epa,osha and other rules so many others don’t and everyone wants it cheap
 

Weather Man

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Hyundai is working on developing its own semiconductor chips in-house



  • Hyundai Motor (OTCPK:HYMTF +1.6%) wants to develop its own semiconductor chips following a global shortage that continues to plaque automakers.
  • Hyundai had to temporarily shut down some of its factories due to the chip shortage but COO Jose Munoz says that the problems have reached their peak following the "toughest months" of August and September.
  • Companies such as Intel (INTC +2.9%) have been investing in expanding semiconductor chip capacity at factories. "But also in our case, we want to be able to develop our own chips within the group, so we are a little bit less dependent in a potential situation like this," Munoz said.
  • Munoz also added that Hyundai plans to make up for the lost production by delivering more vehicles next year. Only a few automakers besides Hyundai, such as Toyota (TM -0.4%), Tesla (TSLA +0.7%), were able to increase global sales in spite of the chip shortage.
  • Munoz, whose company is non-union, also believes that the US government should give all EV vehicle producers a proposed $4,500 tax credits, not just those in unions.
 

Weather Man

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Volkswagen temporarily shuts down Skoda Auto production due to chip shortage

  • Volkswagen's (OTCPK:VWAGY) Skoda Auto begins a two-week production suspension Monday as semiconductor chip and other parts shortages continue to hurt automakers. Sales of Skoda branded vehicles accounted for 9.3% of Volkswagen's total vehicle revenue in 2020.
  • "Skoda Auto has been struggling with a big shortage of critical components, which has forced it to limit production significantly in the past weeks," spokesman Tomas Kotera commented.
  • Skoda previously said it would "significantly reduce or even halt" production beginning Oct. 18 until the end of the year. The news is particularly bad for the Czech Republic, for which the car sector employs 180,000 workers and makes up a quarter of the industrial economy. Skoda is the largest exporter in the country.
  • According to The Czech Auto Industry Association, Czech auto companies will make 250,000 fewer cars this year because of the chip shortage, costing them $9.14B in sales.
  • See what how much Volkswagen would be worth if it was valued like other EV companies as calculated by Seeking Alpha contributor Johnathan Weber.
 

Weather Man

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People that were trying to wait it out are paying up, they can't wait anymore.


AutoNation rallies after smashing earnings as demand continues to outpace supply

  • AutoNation (NYSE:AN) tracks higher after smashing consensus estimates with its Q3 earnings report.
  • Same store revenue was up 18% during the quarter to $6.4B and same store gross profit rose 29%.
  • Same-store new vehicle gross profit per vehicle retailed rose 116% to a record $5,484. Same-store used vehicle gross profit per vehicle retailed was up 5% to $2,104.
  • CEO Mike Jackson says demand continues to outpace supply for new vehicles. "New vehicle sales are constrained by reduced production volume with low inventory levels. We expect this pent up demand to support sales for the foreseeable future," he adds.
  • Shares of AutoNation (AN) are up 2.86% premarket to $120.31 after the strong earnings report.
 

Weather Man

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Renaults cuts production outlook by 500,000 cars due to chip shortage



  • Renault (OTC:RNSDF) lowers its output forecast for this year after group revenues fell 13.4% and global unit sales fell 22.3% in the third quarter.
  • Renault produced 170,000 fewer units in Q3 than it originally planned and the Group now anticipates production losses of 500,000 vehicles for the year due to the global chip shortage. CFO Clotlide Delbos said visibility surrounding the chip shortage was "still very poor because the information coming from suppliers is very unreliable" but that he expects chip production to remain constrained through 2022.
  • When asked about raw materials, Delbos said that the company wasn't experiencing any shortages but was encountering higher material costs.
  • Renault has been focusing on higher margin cars amid the chip shortage and it expects operating margins and profit to remain around the same as H1 2021. The lower decline in revenues, limited to -13.4%, "confirms the positive impact of the Group's commercial policy oriented towards better value from sales," writes the automaker.
  • SA contributor The Value Pendulum assigns a Neutral rating to Renault and believes headwinds will continue to hurt the stock.
 

Weather Man

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Mercedes-Benz is switching to higher priced chips to solve shortage issues



  • Daimler's (OTCPK:DDAIF) Mercedes-Benz plans to use more expensive semiconductor chips in its cars following the global shortage continuing to plague automakers.
  • The automaker has partnered with chipmaker Nvidia Corp. (NASDAQ:NVDA) to manufacture chips for its most complicated features, like AI-assisted driving, but that isn't what's hurting Mercedes-Benz the most.
  • “What’s short are the simplest parts, the dollar-a-pop” chips like those that are used to lock doors, said CEO Ola Kallenius “What we’re doing together with the chip producers is trying to migrate some of those simpler, older node technologies into more modern nodes where there’s more capacity.”
  • Kallenius expects a gradual improvement in chip production through the fourth quarter, but shortages could still last into 2022 according to some CEOs.
 

Weather Man

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Stellantis reports Q3 results, issues full year guidance

STLA -0.15%Oct. 28, 2021 2:15 AM ET
  • Stellantis (NYSE:STLA): Q3 Revenue of €32.55B (-13.7% Y/Y)
  • Press Release
  • Consolidated shipments of 1,131K units, down 27% compared to Q3 2020 pro Forma primarily due to loss of ~30% of Q3 2021 planned production, or ~600K units, due to unfilled semiconductors orders.
  • Total new vehicle inventory of 689K units at September 30, 2021, including company inventory of 148K units.
  • FY 2021 guidance - Confirmed Adjusted operating income margin ‡(3) of ~10%.
 

Weather Man

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Toyota vehicle production down 38% in September due to semiconductor shortage

TM -0.14%Oct. 29, 2021 9:28 AM ET1 Comment
  • Toyota Motor Corporation (NYSE:TM) vehicle sales were 16.9% below their 2020 levels in September, while worldwide production fell 38.0% Y/Y due to the parts shortages caused by factory closures in Southeast Asia.
  • The decline was driven by fewer sales in Japan, which were down 37.1% and caused Toyota to lose 3.3% market share in the country. Sales outside of Japan fell 10.7% in September.
  • When including all of Japan's first half (April to September) of FY2022, however, sales grew 20.6% and production grew 18.7% against a comparable period that was heavily impacted by the COVID-19 pandemic. Market share in Japan was up 1.7% during the entire period.
  • "The situation remains unclear with respect to both COVID-19 trends and parts supplies, but we will continue to make every effort to minimize the impact," wrote the auto manufacturer in a press release.
  • The falling sales are a trend seen across most of the major automakers, with Tesla being a notable exception.
 

Weather Man

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Tata Motors reports FQ2 results, JLR expects to recover in 1H22

TTM -1.44%Now!
  • Tata Motors (NYSE:TTM): FQ2 GAAP EPS of -₹11.60.
  • Revenue of $613.78B (+14.7% Y/Y).
  • Shares +2.9% PM.
  • Press release
  • Looking ahead, the semiconductor shortage remains dynamic and difficult to forecast, however, JLR expects to see gradual recovery starting in the second half of FY22. While supply remains constrained, JLR will continue to take mitigating actions, including prioritising the production of higher margin vehicles for the available supply of semiconductors and closely managing costs to bring down the break-even point for the business. Further, JLR is taking measures to increase the future visibility and control over semiconductor supply for its vehicles, working closely with semiconductor and Tier One suppliers. As a result,
 

Weather Man

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Nintendo is said to cut Switch production by 20% on chip shortage

NTDOY +0.53%Nov. 02, 2021 8:21 AM ET
  • Nintendo (OTCPK:NTDOY) is said to cut production for its Switch gaming consoles to about 24M units for the fiscal year ending in March, 20% below its original plan of 30M.
  • The production has been delayed by shortages of semiconductors and other electric parts even as it sees strong demand for its latest Switch console released last month, according to a Nikkei report.
  • A Nintendo spokesperson told Nikkei that the company is assessing the impact of the component shortage on its production.
 

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